Results for the Quarter Ended
- Net investment income per share for the quarter was
$0.44 , compared to$0.45 for the quarter endedMarch 31, 2023 - Net asset value per share as of the end of the quarter was
$15.20 , compared to$15.18 as ofMarch 31, 2023 , an increase of$0.02 per share primarily due to net investment income above the dividend - New investment commitments made during the quarter totaled
$79 million (1) - Gross fundings for corporate lending(2), excluding revolver fundings, totaled
$73 million and net fundings for corporate lending, including revolvers, totaled$29 million for the quarter - Net leverage(3) was 1.45x as of
June 30, 2023 - Repurchased 198,084 shares of common stock at a weighted average price per share of
$11.60 , inclusive of commissions, for an aggregate cost of$2.3 million during the quarter - Amended and extended the Company's senior secured, multi-currency, revolving credit facility (the “Facility”) in
April 2023 ; Maturity date was extended by over two years(4) Kroll Bond Rating Agency (KBRA) affirmed the Company’s BBB- issuer and senior unsecured debt ratings in June- Declared a dividend of
$0.38 per share for the quarter endingJune 30, 2023 (5)
On
Mr.
___________________
(1) Commitments made for the corporate lending portfolio.
(2) Gross fundings for corporate lending include
(3) The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
(4) Lender commitments under the Facility will remain
(5) The dividend is payable on
FINANCIAL HIGHLIGHTS
($ in billions, except per share data) | 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||
Total assets | $ | 2.50 | $ | 2.49 | $ | 2.53 | $ | 2.57 | $ | 2.64 | ||||||
Investment portfolio (fair value) | $ | 2.41 | $ | 2.39 | $ | 2.40 | $ | 2.46 | $ | 2.55 | ||||||
Debt outstanding | $ | 1.48 | $ | 1.47 | $ | 1.48 | $ | 1.50 | $ | 1.60 | ||||||
Net assets | $ | 0.99 | $ | 0.99 | $ | 0.99 | $ | 1.01 | $ | 0.99 | ||||||
Net asset value per share | $ | 15.20 | $ | 15.18 | $ | 15.10 | $ | 15.45 | $ | 15.52 | ||||||
Debt-to-equity ratio | 1.49 x | 1.48 x | 1.50 x | 1.49 x | 1.62 x | |||||||||||
Net leverage ratio (1) | 1.45 x | 1.41 x | 1.41 x | 1.42 x | 1.58 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 | Six Months Ended | |||||||||||||||
(in millions)* | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Investments made in portfolio companies | $ | 101.6 | $ | 227.4 | $ | 252.7 | $ | 447.5 | ||||||||
Investments sold | — | — | — | (9.7 | ) | |||||||||||
Net activity before repaid investments | 101.6 | 227.4 | 252.7 | 437.8 | ||||||||||||
Investments repaid | (79.2 | ) | (184.0 | ) | (250.8 | ) | (448.6 | ) | ||||||||
Net investment activity | $ | 22.4 | $ | 43.4 | $ | 1.9 | $ | (10.8 | ) | |||||||
Portfolio companies, at beginning of period | 141 | 139 | 135 | 139 | ||||||||||||
Number of investments in new portfolio companies | 12 | 7 | 20 | 13 | ||||||||||||
Number of exited companies | (3 | ) | (6 | ) | (5 | ) | (12 | ) | ||||||||
Portfolio companies at end of period | 150 | 140 | 150 | 140 | ||||||||||||
Number of investments in existing portfolio companies | 40 | 53 | 61 | 72 |
____________________
* Totals may not foot due to rounding.
OPERATING RESULTS
Three Months Ended | Six Months Ended | |||||||||||||||
(in millions)* | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net investment income | $ | 28.9 | $ | 23.5 | $ | 58.3 | $ | 50.4 | ||||||||
Net realized and change in unrealized gains (losses) | (3.4 | ) | (17.8 | ) | (2.8 | ) | (40.5 | ) | ||||||||
Net increase in net assets resulting from operations | $ | 25.4 | $ | 5.7 | $ | 55.5 | $ | 9.9 | ||||||||
(per share)* (1) | ||||||||||||||||
Net investment income on per average share basis | $ | 0.44 | $ | 0.37 | $ | 0.89 | $ | 0.79 | ||||||||
Net realized and change in unrealized gain (loss) per share | (0.05 | ) | (0.28 | ) | (0.04 | ) | (0.63 | ) | ||||||||
Earnings per share — basic | $ | 0.39 | $ | 0.09 | $ | 0.85 | $ | 0.16 |
____________________
* 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
Since the inception of the share repurchase program and through
* Share figures have been adjusted for the 1-for-3 reverse stock split which was completed after market close on
LIQUIDITY
As of
On
CONFERENCE CALL / WEBCAST AT
The Company will host a conference call on
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.midcapfinancialic.com.
Our portfolio composition and weighted average yields as of
2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||
Portfolio composition, at fair value: | |||||||||||||||
First lien secured debt | 88% | 89% | 89% | 87% | 91% | ||||||||||
Second lien secured debt | 3% | 3% | 3% | 4% | 4% | ||||||||||
Total secured debt | 91% | 92% | 92% | 91% | 95% | ||||||||||
Unsecured debt | 0% | 0% | —% | —% | —% | ||||||||||
Structured products and other | 2% | 0% | 0% | 0% | 0% | ||||||||||
Preferred equity | 1% | 2% | 2% | 2% | 1% | ||||||||||
Common equity/interests and warrants | 6% | 6% | 6% | 7% | 4% | ||||||||||
Weighted average yields, at amortized cost (1): | |||||||||||||||
First lien secured debt (2) | 11.7% | 11.4% | 10.8% | 9.6% | 8.4% | ||||||||||
Second lien secured debt (2) | 14.2% | 13.7% | 13.2% | 11.8% | 11.7% | ||||||||||
Total secured debt (2) | 11.8% | 11.4% | 10.9% | 9.6% | 8.6% | ||||||||||
Unsecured debt portfolio (2) | 10.0% | 10.0% | 10.0% | —% | —% | ||||||||||
Total debt portfolio (2) | 11.8% | 11.4% | 10.9% | 9.6% | 8.6% | ||||||||||
Total portfolio (3) | 10.0% | 9.7% | 9.3% | 8.0% | 7.5% | ||||||||||
Interest rate type, at fair value (4): | |||||||||||||||
Fixed rate amount | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | |||||
Floating rate amount | $ | 2.1 billion | $ | 2.1 billion | $ | 2.0 billion | $ | 2.0 billion | $ | 2.1 billion | |||||
Fixed rate, as percentage of total | 0% | 0% | 0% | 1% | 1% | ||||||||||
Floating rate, as percentage of total | 100% | 100% | 100% | 99% | 99% | ||||||||||
Interest rate type, at amortized cost (4): | |||||||||||||||
Fixed rate amount | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | |||||
Floating rate amount | $ | 2.1 billion | $ | 2.1 billion | $ | 2.0 billion | $ | 2.0 billion | $ | 2.1 billion | |||||
Fixed rate, as percentage of total | 0% | 0% | 0% | 1% | 1% | ||||||||||
Floating rate, as percentage of total | 100% | 100% | 100% | 99% | 99% | ||||||||||
(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.
STATEMENTS OF ASSETS AND LIABILITIES (In thousands, except share and per share data) | ||||||||
(Unaudited) | ||||||||
Assets | ||||||||
Investments at fair value: | ||||||||
Non-controlled/non-affiliated investments (cost — | $ | 2,007,346 | $ | 1,960,199 | ||||
Non-controlled/affiliated investments (cost — | 79,338 | 49,141 | ||||||
Controlled investments (cost — | 322,603 | 388,780 | ||||||
Cash and cash equivalents | 49,369 | 84,713 | ||||||
Foreign currencies (cost — | 828 | 2,378 | ||||||
Receivable for investments sold | 2,857 | 3,100 | ||||||
Interest receivable | 15,175 | 17,169 | ||||||
Dividends receivable | 3,138 | 4,836 | ||||||
Deferred financing costs | 21,856 | 13,403 | ||||||
Prepaid expenses and other assets | 738 | 1,797 | ||||||
Total Assets | $ | 2,503,248 | $ | 2,525,516 | ||||
Liabilities | ||||||||
Debt | $ | 1,482,515 | $ | 1,483,394 | ||||
Payable for investments purchased | 333 | — | ||||||
Distributions payable | — | 24,217 | ||||||
Management and performance-based incentive fees payable | 10,454 | 9,060 | ||||||
Interest payable | 10,497 | 13,546 | ||||||
Accrued administrative services expense | 1,801 | 748 | ||||||
Other liabilities and accrued expenses | 5,971 | 6,445 | ||||||
Total Liabilities | $ | 1,511,571 | $ | 1,537,410 | ||||
Commitments and contingencies (Note 8) | ||||||||
Net Assets | $ | 991,677 | $ | 988,106 | ||||
Net Assets | ||||||||
Common stock, | $ | 65 | $ | 65 | ||||
Capital in excess of par value | 2,104,823 | 2,107,120 | ||||||
Accumulated under-distributed (over-distributed) earnings | (1,113,211 | ) | (1,119,079 | ) | ||||
Net Assets | $ | 991,677 | $ | 988,106 | ||||
Net Asset Value Per Share | $ | 15.20 | $ | 15.10 | ||||
STATEMENTS OF OPERATIONS (In thousands, except per share data) | ||||||||||||||||
| ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Investment Income | ||||||||||||||||
Non-controlled/non-affiliated investments: | ||||||||||||||||
Interest income (excluding Payment-in-kind (“PIK”) interest income) | $ | 61,826 | $ | 42,448 | $ | 121,846 | $ | 85,766 | ||||||||
Dividend income | 115 | 25 | 137 | 26 | ||||||||||||
PIK interest income | 339 | 414 | 668 | 645 | ||||||||||||
Other income | 1,034 | 276 | 2,969 | 1,579 | ||||||||||||
Non-controlled/affiliated investments: | ||||||||||||||||
Interest income (excluding PIK interest income) | 282 | 48 | 560 | 96 | ||||||||||||
Dividend income | — | 311 | — | 642 | ||||||||||||
PIK interest income | 32 | 19 | 60 | 38 | ||||||||||||
Other income | — | — | — | — | ||||||||||||
Controlled investments: | ||||||||||||||||
Interest income (excluding PIK interest income) | 4,547 | 9,101 | 9,036 | 18,215 | ||||||||||||
Dividend income | — | — | — | — | ||||||||||||
PIK interest income | 441 | 522 | 869 | 897 | ||||||||||||
Other income | — | 240 | 250 | 240 | ||||||||||||
Total Investment Income | $ | 68,616 | $ | 53,404 | $ | 136,395 | $ | 108,144 | ||||||||
Expenses | ||||||||||||||||
Management fees | $ | 4,334 | $ | 8,949 | $ | 8,598 | $ | 17,887 | ||||||||
Performance-based incentive fees | 6,120 | 1,396 | 12,316 | 2,439 | ||||||||||||
Interest and other debt expenses | 26,002 | 16,377 | 50,768 | 30,657 | ||||||||||||
Administrative services expense | 1,425 | 1,286 | 2,848 | 2,695 | ||||||||||||
Other general and administrative expenses | 2,236 | 2,206 | 4,492 | 4,571 | ||||||||||||
Total expenses | 40,117 | 30,214 | 79,022 | 58,249 | ||||||||||||
Management and performance-based incentive fees waived | — | — | — | — | ||||||||||||
Performance-based incentive fee offset | — | (75 | ) | (274 | ) | (143 | ) | |||||||||
Expense reimbursements | (351 | ) | (228 | ) | (686 | ) | (342 | ) | ||||||||
Net Expenses | $ | 39,766 | $ | 29,911 | $ | 78,062 | $ | 57,764 | ||||||||
Net Investment Income | $ | 28,850 | $ | 23,493 | $ | 58,333 | $ | 50,380 | ||||||||
Net Realized and Change in Unrealized Gains (Losses) | ||||||||||||||||
Net realized gains (losses): | ||||||||||||||||
Non-controlled/non-affiliated investments | $ | (161 | ) | $ | 314 | $ | (1,038 | ) | $ | 1,071 | ||||||
Non-controlled/affiliated investments | — | — | — | — | ||||||||||||
Controlled investments | — | — | — | — | ||||||||||||
Foreign currency transactions | (4 | ) | (22 | ) | 38 | (2,800 | ) | |||||||||
Net realized gains (losses) | (165 | ) | 292 | (1,000 | ) | (1,729 | ) | |||||||||
Net change in unrealized gains (losses): | ||||||||||||||||
Non-controlled/non-affiliated investments | 1,386 | (11,315 | ) | 1,342 | (12,970 | ) | ||||||||||
Non-controlled/affiliated investments | (916 | ) | (3,490 | ) | 316 | (7,100 | ) | |||||||||
Controlled investments | (2,109 | ) | (7,575 | ) | (794 | ) | (27,458 | ) | ||||||||
Foreign currency translations | (1,641 | ) | 4,254 | (2,661 | ) | 8,774 | ||||||||||
Net change in unrealized gains (losses) | (3,280 | ) | (18,126 | ) | (1,797 | ) | (38,754 | ) | ||||||||
Net Realized and Change in Unrealized Gains (Losses) | $ | (3,445 | ) | $ | (17,834 | ) | $ | (2,797 | ) | $ | (40,483 | ) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 25,405 | $ | 5,659 | $ | 55,536 | $ | 9,897 | ||||||||
Earnings (Loss) Per Share — Basic | $ | 0.39 | $ | 0.09 | 0.85 | 0.16 | ||||||||||
Important Information
Investors are advised to carefully consider the investment objective, risks, charges and expenses of the Company before investing. The prospectus dated
The information in the prospectus and in this announcement is not complete and may be changed. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
Past performance is not indicative of, or a guarantee of, future performance. The performance and certain other portfolio information quoted herein represents information as of dates noted herein. Nothing herein shall be relied upon as a representation as to the future performance or portfolio holdings of the Company. Investment return and principal value of an investment will fluctuate, and shares, when sold, may be worth more or less than their original cost. The Company’s performance is subject to change since the end of the period noted in this report and may be lower or higher than the performance data shown herein.
About
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 effects of the COVID-19 pandemic; changes in general economic conditions, including the impact of supply chain disruptions, or changes in financial markets, and the risk of recession; changes in the interest rate environment and levels of general interest rates and the impact of inflation; 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.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described in the Company’s filings with the
Contact
Investor Relations Manager
212.822.0625
ebesen@apollo.com
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