Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company”)
announces its first quarter 2019 financial results.
Recent Developments
As previously announced, the Company entered
into a stock purchase and transaction agreement (the
“Externalization Agreement”) with BC Partners Advisors, LP, an
affiliate of BC Partners LLP, pursuant to which the Company’s
management function would be externalized (the “Externalization”).
At a special meeting of the Company’s stockholders held on February
19, 2019, the Company’s stockholders approved the investment
advisory agreement between the Company and Sierra Crest Investment
Management LLC, an affiliate of BC Partners Advisors, LP, (the
“Adviser”). The transactions contemplated by the Externalization
Agreement closed on April 1, 2019, and the Company commenced
operations as an externally managed BDC managed by the Adviser on
that date.
Financial Highlights
- Stockholders received a cash payment of $0.66972 per share upon
closing of the Externalization on April 1, 2019.
- Portman Ridge Finance Corporation declared a first quarter
stockholder distribution of $0.10 per share.
- Net investment loss for the first quarter ended March 31, 2019
was approximately $(2.2) million, or $(0.06) per basic share,
compared with net investment income of approximately $2.5 million,
or $0.07 per basic share in the quarter ended March 31,
2018.
- Expenses associated with the Externalization totaled
approximately $3.4 million or $0.09 per share during the first
quarter of 2019.
- At March 31, 2019, the fair value of the Company's investments
totaled approximately $282 million.
- Net asset value per share as of March 31, 2019 was $3.85.
Ted Goldthorpe, Chief Executive Officer of
Portman Ridge Finance Corporation, noted, “We are pleased to have
successfully closed the Externalization on April 1st, which
provided stockholders with a cash payment of approximately $0.67
per share. We are actively repositioning the portfolio in the
short-term and believe that the benefits associated with being
externally managed and part of the broader BC Credit platform will
enhance long-term value for stockholders.”
Operating Results
For the three months ended March 31, 2019, the
Company reported total investment income of approximately $5.8
million as compared to approximately $6.8 million in the same
period last year. Investment income from debt securities decreased
22% to approximately $2.9 million from approximately $3.8 million
in the first quarter 2018. Changes in portfolio mix as well as an
increase in non-accrual investments in the first quarter of 2019
were the primary contributors to this decline. Investment income on
CLO fund securities in the first quarter of 2019 decreased
slightly, to approximately $1.8 million from $1.9 million in the
first quarter of 2018.
For the three months ended March 31, 2019, total
expenses were approximately $8.0 million, including approximately
$3.4 million in expenses associated with the Externalization.
Interest expense and amortization on debt issuance costs for the
period were approximately $1.8 million, compared with $1.9 million
for the same period 2018.
Net investment loss for the first quarter of 2019 was approximately
$(2.2) million, or $(0.06) per basic share, versus net investment
income of approximately $2.5 million, or $0.07 per basic share,
during the first quarter of 2018. Net realized and unrealized
depreciation on investments for the three months ended March 31,
2019 was approximately $8.7 million, as compared to net realized
and unrealized appreciation of approximately $318,000 for the same
period in 2018.
Portfolio and Investment
Activity
The fair value of our portfolio was
approximately $282 million as of March 31, 2019. The composition of
our investment portfolio at March 31, 2019 and December 31, 2018 at
cost and fair value was as follows:
|
|
March 31, 2019 (unaudited) |
|
|
December 31, 2018 |
|
Security
Type |
|
Cost/AmortizedCost |
|
Fair Value |
|
%¹ |
|
Cost/AmortizedCost |
|
Fair Value |
|
%¹ |
Short-term investments² |
|
$ |
44,120,648 |
|
$ |
44,120,648 |
|
16 |
|
|
$ |
44,756,478 |
|
$ |
44,756,478 |
|
17 |
|
Senior Secured Loan |
|
|
75,534,527 |
|
|
73,489,758 |
|
26 |
|
|
|
86,040,921 |
|
|
77,616,209 |
|
28 |
|
Junior Secured Loan |
|
|
88,707,755 |
|
|
78,249,650 |
|
28 |
|
|
|
76,223,561 |
|
|
70,245,535 |
|
26 |
|
Senior Unsecured Bond |
|
|
456,974 |
|
|
456,974 |
|
- |
|
|
|
|
|
|
— |
|
— |
|
CLO Fund Securities |
|
|
54,299,958 |
|
|
45,605,015 |
|
16 |
|
|
|
55,480,626 |
|
|
44,325,000 |
|
16 |
|
Equity Securities |
|
|
29,326,114 |
|
|
16,835,340 |
|
6 |
|
|
|
21,944,430 |
|
|
14,504,687 |
|
5 |
|
Asset Manager Affiliates³ |
|
|
17,791,230 |
|
|
— |
|
— |
|
|
|
17,791,230 |
|
|
3,470,000 |
|
1 |
|
Joint Venture |
|
|
24,914,858 |
|
|
23,707,969 |
|
8 |
|
|
|
24,914,858 |
|
|
18,390,440 |
|
7 |
|
Total |
|
$ |
335,152,064 |
|
$ |
282,465,354 |
|
100 |
% |
|
$ |
327,152,104 |
|
$ |
273,308,349 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
¹
Represents percentage of total portfolio at fair value. |
|
|
² Includes
money market accounts and U.S. treasury bills. |
|
|
³
Represents the equity investment in the Asset Manager
Affiliates. |
|
|
|
|
|
Liquidity and Capital
Resources
At March 31, 2019, we had unrestricted cash and
money market balances of approximately $47.4 million, total assets
of approximately $293 million and stockholders' equity of
approximately $144 million. Our net asset value per common share
was $3.85. As of March 31, 2019, we had approximately $121.3
million (par value) of borrowings outstanding ($117.9 million net
of capitalized costs) with a weighted average interest rate of
approximately 6.0%. Our asset coverage ratio stood at 216% as of
March 31, 2019.
Subject to prevailing market conditions, we
intend to grow our portfolio of assets by raising additional
capital, including through the prudent use of leverage available to
us. As a result, we may seek to enter into new agreements with
other lenders or into other financing arrangements as market
conditions permit. Such financing arrangements may include a new
secured and/or unsecured credit facility or the issuance of
unsecured debt or preferred stock.
Conference Call and Webcast
We will hold a conference call on Friday, May
10, 2019 at 9:00 am Eastern Time to discuss our first quarter 2019
financial results. Stockholders, prospective stockholders and
analysts are welcome to listen to the call or attend the
webcast.
To access the call please dial (866) 757-5630
approximately 10 minutes prior to the start of the conference call.
No password is required. A live audio webcast of the conference
call can be accessed via the Internet, on a listen-only basis on
our Company's website www.portmanridge.com in the Investor
Relations section under Events. The online archive of the webcast
will be available after 7pm Eastern Time for approximately 90
days.
A replay of this conference call will be
available from 12:00 p.m. on May 10, 2019 until 11:59 p.m. on May
18, 2019. The dial in number for the replay is (855) 859-2056 and
the conference ID is 2309217.
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 Finance
Corporation’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. PTMN’s investment activities are managed by
its investment adviser, Sierra Crest Investment Management LLC, an
affiliate of BC Partners Advisors, LP.
Portman Ridge Finance Corporation's filings with
the Securities and Exchange Commission, earnings releases, press
releases and other financial, operational and governance
information are available on the Company's website at
www.portmanridge.com.
The Portman Ridge Finance Corporation logo is available at
https://ml.globenewswire.com/Resource/Download/39c70ff2-a155-44fc-872b-f68105f0d5ad?size=0
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. 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) failure to realize the anticipated benefits of
the Externalization; (3) the ability of the Company and/or BC
Partners to implement its business strategy; (4) the risk that
stockholder litigation in connection with the Externalization may
result in significant costs of defense, indemnification and
liability; (5) evolving legal, regulatory and tax regimes;
(6) changes in general economic and/or industry specific
conditions; (7) the impact of increased competition; (8) business
prospects and the prospects of the Company’s portfolio companies;
(9) contractual arrangements with third parties; (10) any future
financings by the Company; (11) the ability of the Advisor to
attract and retain highly talented professionals; and (12) the
Company’s ability to fund any unfunded commitments. Further
information about factors that could affect our financial and other
results is included in our filings with the Securities and Exchange
Commission. 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 Securities and Exchange
Commission.
ContactTed Gilpin
Ted.Gilpin@bcpartners.com
(212) 891-5007
Portman Ridge Finance Corporation650 Madison
Avenue, 23rd floorNew York, NY 10022info@portmanridge.com
Source: Portman Ridge Finance Corporation. News
Provided by Acquire Media
|
PORTMAN
RIDGE FINANCE CORPORATION |
CONSOLIDATED
BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
As ofMarch 31, 2019 |
|
As ofDecember 31, 2018 |
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
Investments at fair
value: |
|
|
|
|
|
|
Short-term investments (cost: 2019 - $44,120,648; 2018 -
$44,756,478) |
|
$ |
44,120,648 |
|
|
$ |
44,756,478 |
|
Debt securities (amortized
cost: 2019 - $164,699,256; 2018 - $162,264,482) |
|
|
152,196,382 |
|
|
|
147,861,744 |
|
CLO Fund Securities managed by
affiliates (amortized cost: 2019 - $4,416,048; 2018 -
$4,407,106) |
|
|
4,400,213 |
|
|
|
4,473,840 |
|
CLO Fund Securities managed by
non-affiliates (amortized cost: 2019 - $49,883,910; 2018 -
$51,073,520) |
|
|
41,204,802 |
|
|
|
39,851,160 |
|
Equity securities (cost: 2019
- $29,326,114; 2018 - $21,944,430) |
|
|
16,835,340 |
|
|
|
14,504,687 |
|
Asset Manager Affiliates
(cost: 2019 - $17,791,230; 2018 - $17,791,230) |
|
|
— |
|
|
|
3,470,000 |
|
Joint Venture (cost: 2019 -
$24,914,858; 2018 - $24,914,858) |
|
|
23,707,969 |
|
|
|
18,390,440 |
|
Total Investments at Fair
Value (cost: 2019 - $335,152,064; 2018 - $327,152,104) |
|
|
282,465,354 |
|
|
|
273,308,349 |
|
Cash |
|
|
3,288,010 |
|
|
|
5,417,125 |
|
Restricted cash |
|
|
1,466,002 |
|
|
|
3,907,341 |
|
Interest receivable |
|
|
877,156 |
|
|
|
1,342,970 |
|
Due from affiliates |
|
|
928,098 |
|
|
|
1,007,631 |
|
Operating lease right-of-use
asset |
|
|
3,181,469 |
|
|
|
— |
|
Other assets |
|
|
570,370 |
|
|
|
481,265 |
|
Total Assets |
|
$ |
292,776,459 |
|
|
$ |
285,464,681 |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
6.125% Notes Due 2022 (net of
offering costs of: 2019-$2,071,220; 2018 - $2,207,342) |
|
$ |
75,335,980 |
|
|
$ |
75,199,858 |
|
Great Lakes KCAP Funding I,
LLC Revolving Credit Facility (net of offering costs of:
2019-$1,327,960; 2018 - $1,155,754) |
|
|
42,543,122 |
|
|
|
25,200,331 |
|
Operating lease liability |
|
|
3,553,359 |
|
|
|
— |
|
Payable for open trades |
|
|
23,624,746 |
|
|
|
23,204,564 |
|
Accounts payable and accrued
expenses |
|
|
3,898,900 |
|
|
|
3,591,910 |
|
Accrued interest payable |
|
|
134,324 |
|
|
|
131,182 |
|
Due to affiliates |
|
|
— |
|
|
|
115,825 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
149,090,431 |
|
|
|
127,443,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
Common stock, par value $0.01
per share, 100,000,000 common shares authorized; 37,526,568 issued,
and 37,331,709 outstanding at March 31, 2019, and 37,521,705
issued, and 37,326,846 outstanding at December 31, 2018 |
|
|
373,317 |
|
|
|
373,268 |
|
Capital in excess of par
value |
|
|
307,099,763 |
|
|
|
306,784,387 |
|
Total distributable (loss)
earnings |
|
|
(163,787,052 |
) |
|
|
(149,136,644 |
) |
|
|
|
|
|
|
|
Total Stockholders'
Equity |
|
|
143,686,028 |
|
|
|
158,021,011 |
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity |
|
$ |
292,776,459 |
|
|
$ |
285,464,681 |
|
|
|
|
|
|
|
|
NET ASSET VALUE PER COMMON
SHARE |
|
$ |
3.85 |
|
|
$ |
4.23 |
|
|
|
|
|
|
|
|
|
|
PORTMAN RIDGE FINANCE CORPORATION |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited) |
|
|
Three Months Ended |
|
March 31, |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
Investment
Income: |
|
|
|
|
|
|
Interest from investments in debt securities |
$ |
2,936,796 |
|
|
$ |
3,398,197 |
|
|
Payment-in-kind investment
income |
|
2,022 |
|
|
|
362,937 |
|
|
Interest from cash and
time deposits |
|
35,669 |
|
|
|
49,205 |
|
|
Investment income on CLO Fund
Securities managed by affiliates |
|
132,446 |
|
|
|
1,833,667 |
|
|
Investment income on CLO Fund
Securities managed by non-affiliates |
|
1,681,274 |
|
|
|
99,361 |
|
|
Dividends from Asset Manager
Affiliates |
|
— |
|
|
|
320,000 |
|
|
Investment income - Joint
Venture |
|
950,000 |
|
|
|
700,000 |
|
|
Capital structuring service
fees |
|
61,203 |
|
|
|
63,110 |
|
|
Total investment income |
|
5,799,410 |
|
|
|
6,826,477 |
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
Interest and amortization of
debt issuance costs |
|
1,800,926 |
|
|
|
1,863,848 |
|
|
Compensation |
|
3,688,578 |
|
|
|
1,207,337 |
|
|
Professional fees |
|
1,668,122 |
|
|
|
714,410 |
|
|
Insurance |
|
88,651 |
|
|
|
78,022 |
|
|
Administrative and other |
|
748,320 |
|
|
|
502,118 |
|
|
Total expenses |
|
7,994,597 |
|
|
|
4,365,735 |
|
|
|
|
|
|
|
|
Net
Investment (Loss) Income |
|
(2,195,187 |
) |
|
|
2,460,742 |
|
Realized
And Unrealized (Losses) Gains On Investments: |
|
|
|
|
|
|
Net realized (losses) gains
from investment transactions |
|
(13,349,430 |
) |
|
|
3,101 |
|
|
Net change in unrealized
(depreciation) appreciation on: |
|
|
|
|
|
|
Debt securities |
|
1,899,864 |
|
|
|
(442,884 |
) |
|
Equity securities |
|
(5,051,031 |
) |
|
|
63,596 |
|
|
CLO Fund Securities managed by affiliates |
|
(82,569 |
) |
|
|
(220,819 |
) |
|
CLO Fund Securities managed by non-affiliates |
|
2,543,252 |
|
|
|
349,355 |
|
|
Asset Manager Affiliates investments |
|
— |
|
|
|
314,000 |
|
|
Joint Venture Investment |
|
5,317,529 |
|
|
|
251,376 |
|
|
Total net change in unrealized appreciation |
|
4,627,045 |
|
|
|
314,624 |
|
|
Net realized and unrealized
(depreciation) appreciation on investments |
|
(8,722,385 |
) |
|
|
317,725 |
|
Realized losses on
extinguishments of Debt |
|
— |
|
|
|
(169,074 |
) |
Net
(Decrease) Increase In Stockholders’ Equity Resulting From
Operations |
$ |
(10,917,572 |
) |
|
$ |
2,609,393 |
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase In
Stockholders' Equity Resulting from Operations per Common
Share: |
|
|
|
|
|
|
Basic: |
$ |
(0.29 |
) |
|
$ |
0.07 |
|
|
Diluted: |
$ |
(0.29 |
) |
|
$ |
0.07 |
|
|
Net Investment (Loss) Income
Per Common Share: |
|
|
|
|
|
|
Basic: |
$ |
(0.06 |
) |
|
$ |
0.07 |
|
|
Diluted: |
$ |
(0.06 |
) |
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
Weighted Average Shares of
Common Stock Outstanding—Basic |
|
37,335,094 |
|
|
|
37,350,411 |
|
|
Weighted Average Shares of
Common Stock Outstanding—Diluted |
|
37,335,094 |
|
|
|
37,350,411 |
|
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