Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or
“Portman Ridge”) announced today its financial results for the
third quarter ended September 30, 2022.
Third Quarter 2022 Highlights
- Total investment income for the third quarter
of 2022 was $19.0 million, of which $15.4 million was attributable
to interest income from the debt securities portfolio. This
compares to total investment income for the second quarter of 2022
of $15.0 million, of which $11.9 million was attributable to
interest income from the debt securities portfolio.
- Core investment income1 for
the third quarter of 2022, excluding the impact of purchase price
accounting, was $17.6 million as compared to $13.7 million in the
second quarter of 2022.
- Net investment income (“NII”) for the third
quarter of 2022 was $8.4 million ($0.87 per share) as compared to
$5.5 million ($0.57 per share) in the second quarter of 2022.
- Net asset value (“NAV”) for the third quarter
of 2022 was $251.6 million ($26.18 per share2) as compared to
$261.7 million ($27.26 per share2) in the second quarter of 2022;
the decline was driven by mark-to-market movements.
- Non-accruals on debt investments, as of
September 30, 2022, were held constant at three debt investments in
comparison to the same number of investments on non-accrual status
as of June 30, 2022. As of both September 30, 2022 and June 30,
2022, debt investments on non-accrual status represented 0.0% and
0.3% of the Company’s investment portfolio at fair value and
amortized cost.
- Total investments at fair value, as of
September 30, 2022, was $571.7 million; when excluding CLO Funds,
Joint Ventures and short-term investments, these investments are
spread across 32 different industries and 117 entities with an
average par balance per entity of approximately $3.4 million.
- Par value of outstanding borrowings, as of
September 30, 2022, was $368.9 million with an asset coverage ratio
of total assets to total borrowings of 167%. On a net basis,
leverage as of September 30, 2022 was 1.3x3 compared to 1.2x3 as of
June 30, 2022.
Subsequent Events
- Increased stockholder distribution
to $0.67 per share for the fourth quarter of 2022, payable on
December 13, 2022 to stockholders of record at the close of
business on November 24, 2022.
Management Commentary Ted
Goldthorpe, Chief Executive Officer of Portman Ridge, stated, “We
were pleased to report a strong [third] quarter of financial
performance, despite operating under difficult market conditions, a
challenging economic environment, rising interest rates, and market
volatility. Our total investment income, core investment income and
net investment income for the third quarter of 2022 all increased
in comparison to the second quarter of 2022, as we started to see
the impact that rising rates had in generating incremental revenue
from our investments. Between the reduced cost of capital from our
amended and extended credit facility with JPMorgan Chase and the
continued benefit of rising rates, we expect this quarter’s strong
performance will continue going forward in future quarters,
allowing us to increase our quarterly dividend to $0.67 per
share.”
Mr. Goldthorpe added, “As we continue to execute
our investment strategy, 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
decisions. We will continue to be prudent with underwriting new
investments given the current economic uncertainty.”
Select Financial Highlights
|
|
For the Three Months
EndedSeptember 30, |
|
|
For the Nine Months EndedSeptember 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Total investment income |
|
|
19,009 |
|
|
|
22,911 |
|
|
|
50,997 |
|
|
|
62,761 |
|
Total expenses |
|
|
10,617 |
|
|
|
9,193 |
|
|
|
29,175 |
|
|
|
29,120 |
|
Net Investment
Income |
|
|
8,392 |
|
|
|
13,718 |
|
|
|
21,822 |
|
|
|
33,641 |
|
Net realized gain (loss) on investments |
|
|
(9,087 |
) |
|
|
(3,931 |
) |
|
|
(28,631 |
) |
|
|
(11,373 |
) |
Net unrealized gain (loss) on investments |
|
|
(2,968 |
) |
|
|
(642 |
) |
|
|
(712 |
) |
|
|
7,593 |
|
Tax (provision) benefit on realized and unrealized gains (losses)
on investments |
|
|
(542 |
) |
|
|
- |
|
|
|
(1,059 |
) |
|
|
- |
|
Net realized and unrealized appreciation (depreciation) on
investments, net of taxes |
|
|
(12,597 |
) |
|
|
(4,573 |
) |
|
|
(30,402 |
) |
|
|
(3,780 |
) |
Realized gains (losses) on extinguishments of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,835 |
) |
Net Increase (Decrease)
in Net Assets Resulting from Operations |
|
$ |
(4,205 |
) |
|
$ |
9,145 |
|
|
$ |
(8,580 |
) |
|
$ |
28,026 |
|
Net Increase (Decrease) In Net Assets Resulting from Operations per
Common Share(4): |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
(0.44 |
) |
|
$ |
1.00 |
|
|
$ |
(0.89 |
) |
|
$ |
3.41 |
|
Net Investment Income Per Common Share(4): |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
0.87 |
|
|
$ |
1.50 |
|
|
$ |
2.26 |
|
|
$ |
4.10 |
|
Weighted Average Shares of Common Stock Outstanding—Basic and
Diluted(4) |
|
|
9,602,712 |
|
|
|
9,131,456 |
|
|
|
9,644,870 |
|
|
|
8,213,661 |
|
4 The Company completed a Reverse Stock Split of 10 to 1
effective August 26, 2021. As a result, the share and per share
amounts have been adjusted retroactively to reflect the split for
all periods prior to August 26, 2021.
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
($ in
thousands) |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
Interest from investments in debt excluding accretion |
|
$ |
12,232 |
|
$ |
14,602 |
|
|
$ |
31,320 |
|
$ |
36,750 |
|
Purchase discount accounting |
|
|
1,404 |
|
|
2,790 |
|
|
|
4,518 |
|
|
11,987 |
|
PIK Investment Income |
|
|
1,740 |
|
|
1,296 |
|
|
|
4,414 |
|
|
3,173 |
|
CLO Income |
|
|
914 |
|
|
748 |
|
|
|
3,476 |
|
|
2,211 |
|
JV Income |
|
|
2,182 |
|
|
2,443 |
|
|
|
6,361 |
|
|
7,012 |
|
Service Fees |
|
|
537 |
|
|
1,032 |
|
|
|
908 |
|
|
1,628 |
|
Investment Income |
|
|
19,009 |
|
|
22,911 |
|
|
|
50,997 |
|
|
62,761 |
|
Less: Purchase discount accounting |
|
|
(1,404 |
) |
|
(2,790 |
) |
|
|
(4,518 |
) |
|
(11,987 |
) |
Core Investment Income |
|
|
17,605 |
|
|
20,121 |
|
|
|
46,479 |
|
|
50,774 |
|
Total investment income for the three months
ended September 30, 2022 was $19.0 million. This compares to $15.0
million for the quarter ended June 30, 2022, and $16.9 million for
the quarter ended March 31, 2022.
As of September 30, 2022, the weighted average
contractual interest rate on our interest earning debt securities
portfolio was approximately 10.0%. As of June 30, 2022, March 31,
2022, and December 31, 2021, the weighted average contractual
interest rate on our debt securities portfolio was approximately
8.7%, 8.1% and 8.1%, respectively.
Investment Portfolio
ActivityThe composition of our investment portfolio as of
September 30, 2022 and December 31, 2021, at cost and fair value,
were as follows:
|
|
|
|
|
|
|
($ in
thousands) |
|
September 30,
2022(Unaudited) |
|
|
December 31, 2021 |
|
Security
Type |
|
Cost/AmortizedCost |
|
|
Fair Value |
|
|
%(5) |
|
|
Cost/AmortizedCost |
|
|
Fair Value |
|
|
%(5) |
|
Senior Secured Loan |
|
$ |
426,052 |
|
|
$ |
415,819 |
|
|
|
73 |
|
|
$ |
361,556 |
|
|
$ |
364,701 |
|
|
|
66 |
|
Junior Secured Loan |
|
|
65,672 |
|
|
|
61,535 |
|
|
|
11 |
|
|
|
82,996 |
|
|
|
70,549 |
|
|
|
13 |
|
Senior Unsecured Bond |
|
|
416 |
|
|
|
43 |
|
|
|
0 |
|
|
|
416 |
|
|
|
43 |
|
|
|
0 |
|
Equity Securities |
|
|
27,679 |
|
|
|
24,487 |
|
|
|
4 |
|
|
|
26,680 |
|
|
|
22,586 |
|
|
|
4 |
|
CLO Fund Securities |
|
|
37,411 |
|
|
|
24,623 |
|
|
|
4 |
|
|
|
51,561 |
|
|
|
31,632 |
|
|
|
6 |
|
Asset Manager Affiliates(6) |
|
|
17,791 |
|
|
|
- |
|
|
|
- |
|
|
|
17,791 |
|
|
|
- |
|
|
|
- |
|
Joint Ventures |
|
|
55,139 |
|
|
|
45,141 |
|
|
|
8 |
|
|
|
64,365 |
|
|
|
60,474 |
|
|
|
11 |
|
Derivatives |
|
|
31 |
|
|
|
8 |
|
|
|
0 |
|
|
|
31 |
|
|
|
(2,412 |
) |
|
|
- |
|
Total |
|
$ |
630,191 |
|
|
$ |
571,656 |
|
|
|
100 |
% |
|
$ |
605,396 |
|
|
$ |
547,573 |
|
|
|
100 |
% |
5Represents percentage of total portfolio at fair
value.6Represents the equity investment in the Asset Manager
Affiliates.
As of September 30, 2022, three of the Company’s
debt investments were on non-accrual status, unchanged as compared
to June 30, 2022 (this compares to six at March 31, 2022, and seven
at December 31, 2021). Investments on non-accrual status as of
September 30, 2022 and June 30, 2022 represented 0.0% and 0.3% of
the Company’s investment portfolio at fair value and amortized
cost, respectively. This compares to investments on non-accrual
status as of December 31, 2022 of 0.5% and 2.8% of the Company’s
investment portfolio at fair value and amortized cost,
respectively.
Liquidity and Capital Resources
As of September 30, 2022, there was $368.9
million (par value) of borrowings outstanding with a weighted
average interest rate of 5.0%, of which $108.0 million par value
has a fixed rate and $260.9 million par value has a floating
rate.
As of September 30, 2022, the Company had
unrestricted cash of $16.9 million and restricted cash of $22.2
million. This compares to unrestricted cash of $28.9 million and
restricted cash of $39.4 million as of December 31, 2021. As of
September 30, 2022, we had $17.9 million of available borrowing
capacity under the Senior Secured Revolving Credit Facility, and
$25.0 million of borrowing capacity under the 2018-2 Revolving
Credit Facility.
Total assets and shareholder’s equity as of
September 30, 2022 were $629.5 million and $251.6 million,
respectively, as compared to $648.3 million and $280.1 million,
respectively, as of December 31, 2021.
As of September 30, 2022, and December 31, 2021,
the fair value of investments and cash were as follows:
($ in
thousands) |
|
|
|
Security
Type |
|
September 30, 2022 |
|
|
December 31, 2021 |
|
Cash and cash equivalents |
|
$ |
16,871 |
|
|
$ |
28,919 |
|
Restricted Cash |
|
|
22,183 |
|
|
|
39,421 |
|
Senior Secured Loan |
|
|
415,819 |
|
|
|
364,701 |
|
Junior Secured Loan |
|
|
61,535 |
|
|
|
70,549 |
|
Senior Unsecured Bond |
|
|
43 |
|
|
|
43 |
|
Equity Securities |
|
|
24,487 |
|
|
|
22,586 |
|
CLO Fund Securities |
|
|
24,623 |
|
|
|
31,632 |
|
Asset Manager Affiliates |
|
|
- |
|
|
|
- |
|
Joint Ventures |
|
|
45,141 |
|
|
|
60,474 |
|
Derivatives |
|
|
8 |
|
|
|
(2,412 |
) |
Total |
|
$ |
610,710 |
|
|
$ |
615,913 |
|
Interest Rate VolatilityThe Company’s
investment income is affected by fluctuations in various interest
rates, including LIBOR and prime rates.
As of September 30, 2022, approximately 89.3% of
our Debt Securities Portfolio were either floating rate with a
spread to an interest rate index such as LIBOR or the prime rate.
74.8% of these floating rate loans contain LIBOR 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, 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 |
|
$ |
2,100 |
|
|
|
$ |
4,029 |
|
|
|
$ |
5,957 |
|
|
Decrease in interest rate |
|
$ |
1,340 |
|
|
|
$ |
(561) |
|
|
|
$ |
(2,493) |
|
|
Net investment income assuming a 1% increase in
interest rates would increase by approximately $2.1 million on an
annualized basis. If the increase in rates was more significant,
such as 2% or 3%, the net effect on net investment income would be
an increase of approximately $4.0 million and $6.0 million,
respectively.
On an annualized basis, a decrease in interest
rates of 1% would result in an increase in net investment income of
approximately $1.3 million. A decrease in interest rates of 2% and
3% would result in a decrease in net investment income of
approximately $0.6 million and $2.5 million, respectively. The
effect on net investment income from declines in interest rates
impacted by interest rate floors on certain of our floating rate
investments, as there is no floor on our floating rate debt
facility and the 2018-2 Secured Notes.
Conference Call and Webcast We
will hold a conference call on Wednesday, November 9, 2022, at 9:00
am Eastern Time to discuss our third quarter 2022 financial
results. To access the call, please dial (646) 307-1963
approximately 10 minutes prior to the start of the conference call
and use the conference ID 8666889.
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: Portman Ridge Third
Quarter 2022 Conference Call. The online archive of the webcast
will be available on the Company’s website shortly after the
call.
About Portman Ridge Finance
CorporationPortman 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; (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
Corporation650 Madison Avenue, 23rd floorNew York, NY
10022info@portmanridge.com
Jason Roos Chief Financial
OfficerJason.Roos@bcpartners.com(212) 891-2880
Lena CatiThe Equity Group
Inc.lcati@equityny.com(212) 836-9611
PORTMAN RIDGE FINANCE
CORPORATIONCONSOLIDATED BALANCE
SHEETS(in thousands, except share
and per share amounts)
|
September 30, 2022 |
|
|
December 31, 2021 |
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
Investments at fair value: |
|
|
|
|
|
Non-controlled/non-affiliated investments (amortized cost: 2022 -
$510,533; 2021 - $479,153) |
$ |
489,242 |
|
|
$ |
452,482 |
|
Non-controlled affiliated investments (amortized cost: 2022 -
$61,336; 2021 - $74,082) |
|
60,522 |
|
|
|
74,142 |
|
Controlled affiliated investments (cost: 2022 - $58,322; 2021 -
$52,130) |
|
21,892 |
|
|
|
23,361 |
|
Total Investments at Fair Value
(cost: 2022 - $630,191; 2021 - $605,365) |
$ |
571,656 |
|
|
$ |
549,985 |
|
Cash and cash equivalents |
|
16,871 |
|
|
|
28,919 |
|
Restricted cash |
|
22,183 |
|
|
|
39,421 |
|
Interest receivable |
|
3,166 |
|
|
|
5,514 |
|
Receivable for unsettled
trades |
|
12,250 |
|
|
|
20,193 |
|
Due from affiliates |
|
591 |
|
|
|
507 |
|
Other assets |
|
2,808 |
|
|
|
3,762 |
|
Total
Assets |
$ |
629,525 |
|
|
$ |
648,301 |
|
LIABILITIES |
|
|
|
|
|
2018-2 Secured Notes (net of
discount of: 2022 - $1,270; 2021 - $1,403) |
$ |
162,593 |
|
|
$ |
162,460 |
|
4.875% Notes Due 2026 (net of
discount of: 2022 - $1,819; 2021 - $2,157; net of deferred
financing costs of: 2022 - $880; 2021 - $951) |
|
105,301 |
|
|
|
104,892 |
|
Great Lakes Portman Ridge Funding
LLC Revolving Credit Facility (net of deferred financing costs of:
2022 - $1,163; 2021 - $732) |
|
95,908 |
|
|
|
79,839 |
|
Derivative liabilities (cost:
2021 - $31) |
|
- |
|
|
|
2,412 |
|
Payable for unsettled trades |
|
- |
|
|
|
5,397 |
|
Accounts payable, accrued
expenses and other liabilities |
|
4,689 |
|
|
|
4,819 |
|
Accrued interest payable |
|
4,330 |
|
|
|
2,020 |
|
Due to affiliates |
|
1,261 |
|
|
|
1,799 |
|
Management and incentive fees
payable |
|
3,861 |
|
|
|
4,541 |
|
Total
Liabilities |
$ |
377,943 |
|
|
$ |
368,179 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
NET ASSETS |
|
|
|
|
|
Common stock, par value $0.01 per
share, 20,000,000 common shares authorized; 9,906,833 issued, and
9,608,913 outstanding at September 30, 2022, and 9,867,998
issued, and 9,699,695 outstanding at December 31, 2021 |
$ |
97 |
|
|
$ |
97 |
|
Capital in excess of par
value |
|
731,358 |
|
|
|
733,095 |
|
Total distributable (loss)
earnings |
|
(479,873 |
) |
|
|
(453,070 |
) |
Total Net
Assets |
$ |
251,582 |
|
|
$ |
280,122 |
|
Total Liabilities and Net
Assets |
$ |
629,525 |
|
|
$ |
648,301 |
|
NET ASSET VALUE PER COMMON
SHARE(4) |
$ |
26.18 |
|
|
$ |
28.88 |
|
(4) The Company completed a Reverse Stock Split of 10 to 1
effective August 26, 2021, the common shares and net asset value
per common share have been adjusted retroactively to reflect the
split for all periods
presented.
PORTMAN RIDGE FINANCE
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except
share and per share
amounts)(Unaudited)
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
INVESTMENT
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
13,727 |
|
|
$ |
16,370 |
|
|
$ |
37,043 |
|
|
$ |
48,283 |
|
|
Non-controlled affiliated investments |
|
|
823 |
|
|
|
1,775 |
|
|
|
2,271 |
|
|
|
2,670 |
|
|
Controlled affiliated investments |
|
|
- |
|
|
|
(5 |
) |
|
|
- |
|
|
|
(5 |
) |
|
Total interest income |
|
$ |
14,550 |
|
|
$ |
18,140 |
|
|
$ |
39,314 |
|
|
$ |
50,948 |
|
|
Payment-in-kind income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
1,505 |
|
|
$ |
1,225 |
|
|
$ |
3,830 |
|
|
$ |
3,078 |
|
|
Non-controlled affiliated investments |
|
|
74 |
|
|
|
71 |
|
|
|
403 |
|
|
|
95 |
|
|
Controlled affiliated investments |
|
|
161 |
|
|
|
- |
|
|
|
181 |
|
|
|
- |
|
|
Total payment-in-kind income |
|
$ |
1,740 |
|
|
$ |
1,296 |
|
|
$ |
4,414 |
|
|
$ |
3,173 |
|
|
Dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled affiliated investments |
|
$ |
1,149 |
|
|
$ |
2,070 |
|
|
$ |
3,099 |
|
|
$ |
3,997 |
|
|
Controlled affiliated investments |
|
|
1,033 |
|
|
|
373 |
|
|
|
3,262 |
|
|
|
3,015 |
|
|
Total dividend income |
|
$ |
2,182 |
|
|
$ |
2,443 |
|
|
$ |
6,361 |
|
|
$ |
7,012 |
|
|
Fees and other income |
|
$ |
537 |
|
|
$ |
1,032 |
|
|
$ |
908 |
|
|
$ |
1,628 |
|
|
Total investment income |
|
$ |
19,009 |
|
|
$ |
22,911 |
|
|
$ |
50,997 |
|
|
$ |
62,761 |
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees |
|
$ |
2,082 |
|
|
$ |
2,065 |
|
|
$ |
6,305 |
|
|
$ |
5,772 |
|
|
Performance-based incentive fees |
|
|
1,780 |
|
|
|
1,939 |
|
|
|
4,627 |
|
|
|
6,333 |
|
|
Interest and amortization of debt issuance costs |
|
|
4,673 |
|
|
|
3,408 |
|
|
|
11,906 |
|
|
|
10,315 |
|
|
Professional fees |
|
|
759 |
|
|
|
490 |
|
|
|
2,483 |
|
|
|
2,680 |
|
|
Administrative services expense |
|
|
862 |
|
|
|
760 |
|
|
|
2,531 |
|
|
|
2,092 |
|
|
Other general and administrative expenses |
|
|
461 |
|
|
|
531 |
|
|
|
1,323 |
|
|
|
1,928 |
|
|
Total expenses |
|
$ |
10,617 |
|
|
$ |
9,193 |
|
|
$ |
29,175 |
|
|
$ |
29,120 |
|
|
NET INVESTMENT
INCOME |
|
$ |
8,392 |
|
|
$ |
13,718 |
|
|
$ |
21,822 |
|
|
$ |
33,641 |
|
|
REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) from
investment transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
(8,560 |
) |
|
$ |
(2,970 |
) |
|
$ |
(26,339 |
) |
|
$ |
(10,193 |
) |
|
Non-controlled affiliated investments |
|
|
(527 |
) |
|
|
(961 |
) |
|
|
(197 |
) |
|
|
(1,180 |
) |
|
Derivatives |
|
|
- |
|
|
|
- |
|
|
|
(2,095 |
) |
|
|
- |
|
|
Net realized gain (loss) on investments |
|
$ |
(9,087 |
) |
|
$ |
(3,931 |
) |
|
$ |
(28,631 |
) |
|
$ |
(11,373 |
) |
|
Net change in unrealized
appreciation (depreciation) on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
(318 |
) |
|
$ |
310 |
|
|
$ |
5,381 |
|
|
$ |
5,143 |
|
|
Non-controlled affiliated investments |
|
|
338 |
|
|
|
182 |
|
|
|
(874 |
) |
|
|
1,770 |
|
|
Controlled affiliated investments |
|
|
(2,988 |
) |
|
|
(955 |
) |
|
|
(7,661 |
) |
|
|
1,553 |
|
|
Derivatives |
|
|
- |
|
|
|
(179 |
) |
|
|
2,442 |
|
|
|
(873 |
) |
|
Net unrealized gain (loss) on investments |
|
$ |
(2,968 |
) |
|
$ |
(642 |
) |
|
$ |
(712 |
) |
|
$ |
7,593 |
|
|
Tax (provision) benefit on
realized and unrealized gains (losses) on investments |
|
$ |
(542 |
) |
|
$ |
- |
|
|
$ |
(1,059 |
) |
|
$ |
- |
|
|
Net realized and unrealized appreciation (depreciation) on
investments, net of taxes |
|
$ |
(12,597 |
) |
|
$ |
(4,573 |
) |
|
$ |
(30,402 |
) |
|
$ |
(3,780 |
) |
|
Realized gains (losses) on
extinguishments of debt |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(1,835 |
) |
|
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING FROM OPERATIONS |
|
$ |
(4,205 |
) |
|
$ |
9,145 |
|
|
$ |
(8,580 |
) |
|
$ |
28,026 |
|
|
Net Increase (Decrease) In Net Assets Resulting from Operations per
Common Share(4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
(0.44 |
) |
|
$ |
1.00 |
|
|
$ |
(0.89 |
) |
|
$ |
3.41 |
|
|
Net Investment Income Per Common Share(4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
0.87 |
|
|
$ |
1.50 |
|
|
$ |
2.26 |
|
|
$ |
4.10 |
|
|
Weighted Average Shares of Common Stock Outstanding—Basic and
Diluted(4) |
|
|
9,602,712 |
|
|
|
9,131,456 |
|
|
|
9,644,870 |
|
|
|
8,213,661 |
|
|
(4) The Company completed a Reverse Stock Split of 10 to 1
effective August 26, 2021, the common shares and net asset value
per common share have been adjusted retroactively to reflect the
split for all periods presented.
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 NAV per share as
determined in accordance with U.S. generally accepted accounting
principles, or U.S. GAAP, was decreased 6 cents and 1 cent per
share for the quarters ended September 30, 2022 and June 30, 2022,
respectively, due to the impact of quarterly tax provisions. 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 $39.1 million and $44.0 million of cash and cash
equivalents and restricted cash for the quarters ended September
30, 2022 and June 30, 2022, 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.
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