Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or
“Portman Ridge”) announced today its financial results for the
fourth quarter and full year ended December 31, 2022.
Fourth Quarter 2022 Highlights
- Total investment
income for the fourth quarter of 2022 was $18.6 million as
compared to $17.3 million for the fourth quarter of 2021.
- Core investment
income1, excluding the impact of purchase
price accounting, for the fourth quarter of 2022 was $17.7 million
as compared to $17.3 million for the fourth quarter of 2021.
- Net investment income
("NII") for the fourth quarter of 2022 was $7.1 million
($0.74 per share).
- Net asset value
(“NAV”) for the fourth quarter of 2022 was $232.1 million
($24.23 per share).
- Weighted average
contractual interest rate on our interest earning Debt
Securities Portfolio as of December 31, 2022 and December 31, 2021
was approximately 11.1% and 8.1%, respectively.
- Net deployment of $6.3
million, including new fundings of approximately $22.8
million, offset by approximately $16.5 million of repayments.
Approximately 82.0% of new fundings were deployed in First Lien
Term Loans.
- Total shares
repurchased in open market transactions under the Renewed
Stock Repurchase Program during the quarter ended December 31, 2022
were 37,500 at an aggregate cost of approximately $0.8
million.
- Draw of $14.3
million on the $25 million unfunded Class A-1R-R Notes
from the 2018-2 Secured Notes to maximize the remaining capacity of
the Notes.
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.
Full Year 2022 Milestones
- Restructured and refinanced
the Revolving Credit Facility with JPMorgan Chase Bank
during the second quarter of 2022 - the agreement placed
three-month SOFR as the benchmark interest rate and reduced the
applicable margin to 2.80% per annum from 2.85% per annum.
Additionally, the Company extended the reinvestment period and
scheduled termination date to April 29, 2025 and April 29, 2026,
respectively.
- Total shares
repurchased in open market transactions under the Renewed
Stock Repurchase Program during the year ended December 31, 2022
were 167,017 at an aggregate cost of approximately $3.8 million.
This compares to 75,377 shares repurchased during the year ended
December 31, 2021 at an aggregate cost of approximately $1.8
million.
Subsequent Events
- Increased stockholder
distribution to $0.68 per share for the first quarter of
2023, payable on March 31, 2023 to stockholders of record at the
close of business on March 20, 2023. This is a $0.01 per share
distribution increase as compared to the fourth quarter of 2022 and
a $0.05 per share distribution increase as compared to the first
quarter of 2022. This also marks the second consecutive quarter of
a stockholder distribution increase and the fourth stockholder
distribution increase over the last six quarters.
Management Commentary
- Ted Goldthorpe, Chief Executive
Officer of Portman Ridge, stated, “We are pleased to report another
strong quarter of earnings growth despite operating under difficult
market conditions, a challenging economic environment, rising
interest rates, and market volatility. Our core investment income
in 2022 increased by $0.8 million in comparison to 2021 as we
continue to see the impact that rising rates have in generating
incremental revenue from our sourced investments. Additionally, our
amended and extended credit facility with JPMorgan Chase has
reduced our cost of capital, helping further reduce our expenses
relative to our asset base. As we continue to execute our prudent
investment strategy in 2023, 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. We are also anticipating incremental
earnings momentum from the lag in our realized SOFR rates across
our portfolio to come through over the next few quarters. Overall,
our strong performance both this past quarter and this recently
completed fiscal year coupled with our expectations of strong
performance in the quarters ahead has allowed us to raise our
dividend for the second straight quarter to $0.68 per share and we
believe that we are situated to continue delivering attractive
returns to our shareholders in 2023.”
Selected Financial Highlights
- Total investment
income for the year ended 2022 was $69.6 million, of which
$55.8 million was attributable to interest income from the Debt
Securities Portfolio. This compares to total investment income of
$80.1 million for the year ended 2021, of which $63.8 million was
attributable to interest income from the Debt Securities
Portfolio.
- Core investment
income for full year 2022, excluding the impact of
purchase price accounting, was $64.2 million, an increase of $0.8
million as compared to core investment income of $63.4 million for
full year 2021.
- Net investment income
("NII") for full year 2022 was $28.9 million ($3.00 per
share) as compared to $42.0 million ($4.92 per share) for full year
2021. The year-over-year decrease was largely to do a reduction in
non-cash amortization.
- Net asset value
(“NAV”) for full year 2022 was $232.1 million ($24.23 per
share) as compared to $280.1 million ($28.88 per share) for full
year 2021; the decline was driven by mark-to-market movements.
- Non-accruals on debt
investments, as of December 31, 2022, remained relatively
low at four debt investments, which compares to three investments
on non-accrual status as of both September 30, 2022 and June 30,
2022 and seven investments on non-accrual status as of December 31,
2021. As of December 31, 2022, debt investments on non-accrual
status represented 0.0% and 0.6% of the Company’s investment
portfolio at fair value and amortized cost, respectively. This
compares to debt investments on non-accrual status representing
0.5% and 2.8% of the Company’s investment portfolio at fair value
and amortized cost, respectively, as of December 31, 2021.
- Total investments at fair
value as of December 31, 2022 was $576.5 million; when
excluding CLO funds, Joint Ventures, and short-term investments,
these investments are spread across 31 different industries and 119
different entities with an average par balance per entity of
approximately $3.3 million. This compares to $550.0 million of
total investments at fair value (excluding derivatives) as of
December 31, 2021, comprised of investments in 113 different
entities (excluding CLO funds, Joint Ventures, and short-term
investments).
- Par value of outstanding
borrowings, as of December 31, 2022, was $378.2 million
with an asset coverage ratio of total assets to total borrowings of
160%. On a net basis, leverage as of December 31, 2022 was 1.49x2
compared to net leverage of 1.01x2 as of December 31, 2021.
2 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 $33.1 million and $68.3 million of cash and cash
equivalents and restricted cash for the years ended December 31,
2022 and December 31, 2021, respectively. However, the net leverage
ratio is a non-U.S. GAAP measure and should not be considered as a
replacement for the regulatory asset coverage ratio and other
similar information presented in accordance with U.S. GAAP.
Instead, the net leverage ratio should be reviewed only in
connection with such U.S. GAAP measures in analyzing Portman
Ridge’s financial condition.
Results of Operations
Operating results for the years ended
December 31, 2022 and 2021 were as follows:
|
|
For the Year Ended December 31, |
|
|
($ in
thousands) |
|
2022 |
|
|
2021 |
|
|
Total investment income |
|
$ |
69,614 |
|
|
$ |
80,086 |
|
|
Total expenses |
|
|
40,724 |
|
|
|
38,082 |
|
|
Net Investment Income |
|
|
28,890 |
|
|
|
42,004 |
|
|
Net realized gain (loss) on investments |
|
|
(31,185 |
) |
|
|
(4,258 |
) |
|
Net unrealized gain (loss) on investments |
|
|
(17,915 |
) |
|
|
(8,443 |
) |
|
Tax (provision) benefit on realized and unrealized (gains) losses
on investments |
|
|
(786 |
) |
|
|
(1,442 |
) |
|
Net
realized and unrealized appreciation (depreciation) on investments,
net of taxes |
|
|
(49,886 |
) |
|
|
(14,143 |
) |
|
Realized gains (losses) on extinguishments of debt |
|
|
- |
|
|
|
(1,835 |
) |
|
Net Increase (Decrease) In Net Assets Resulting from
Operations |
|
$ |
(20,996 |
) |
|
$ |
26,026 |
|
|
Net Increase (Decrease) In Net Assets Resulting from Operations per
Common Share(3): |
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
(2.18 |
) |
|
$ |
3.05 |
|
|
Net Investment Income Per Common Share(3): |
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
3.00 |
|
|
$ |
4.92 |
|
|
Weighted Average Shares of Common Stock Outstanding—Basic and
Diluted(3) |
|
|
9,634,468 |
|
|
|
8,536,079 |
|
|
3 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.
Investment Income
The composition of our investment income for the
years ended December 31, 2022 and 2021 was as follows:
|
|
For the Year Ended December 31, |
|
($ in
thousands) |
|
2022 |
|
|
2021 |
|
|
Interest from investments in debt excluding accretion |
|
$ |
44,771 |
|
|
$ |
42,787 |
|
|
Purchase
discount accounting |
|
|
5,425 |
|
|
|
16,644 |
|
|
PIK
Investment Income |
|
|
5,608 |
|
|
|
4,345 |
|
|
CLO
Income |
|
|
4,044 |
|
|
|
4,754 |
|
|
JV
Income |
|
|
8,591 |
|
|
|
9,178 |
|
|
Service
Fees |
|
|
1,175 |
|
|
|
2,378 |
|
|
Investment Income |
|
$ |
69,614 |
|
|
$ |
80,086 |
|
|
Less: Purchase discount accounting |
|
$ |
(5,425 |
) |
|
$ |
(16,644 |
) |
|
Core Investment Income |
|
$ |
64,189 |
|
|
$ |
63,442 |
|
|
Fair Value of Investments
The composition of our investment portfolio as
of December 31, 2022 and December 31, 2021 at cost and fair value
was as follows:
($ in
thousands) |
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Security
Type |
|
Cost/AmortizedCost |
|
|
Fair Value |
|
|
%(4) |
|
|
Cost/AmortizedCost |
|
|
Fair Value |
|
|
%(4) |
|
Senior
Secured Loan |
|
$ |
435,856 |
|
|
$ |
418,722 |
|
|
|
73 |
|
|
$ |
361,556 |
|
|
$ |
364,701 |
|
|
|
66 |
|
Junior
Secured Loan |
|
|
65,776 |
|
|
|
56,400 |
|
|
|
10 |
|
|
|
82,996 |
|
|
|
70,549 |
|
|
|
13 |
|
Senior
Unsecured Bond |
|
|
416 |
|
|
|
43 |
|
|
|
0 |
|
|
|
416 |
|
|
|
43 |
|
|
|
0 |
|
Equity
Securities |
|
|
28,848 |
|
|
|
21,905 |
|
|
|
4 |
|
|
|
26,680 |
|
|
|
22,586 |
|
|
|
4 |
|
CLO Fund
Securities |
|
|
34,649 |
|
|
|
20,453 |
|
|
|
3 |
|
|
|
51,561 |
|
|
|
31,632 |
|
|
|
6 |
|
Asset
Manager Affiliates(5) |
|
|
17,791 |
|
|
|
- |
|
|
|
- |
|
|
|
17,791 |
|
|
|
- |
|
|
|
- |
|
Joint
Ventures |
|
|
68,850 |
|
|
|
58,955 |
|
|
|
10 |
|
|
|
64,365 |
|
|
|
60,474 |
|
|
|
11 |
|
Derivatives |
|
|
31 |
|
|
|
- |
|
|
|
- |
|
|
|
31 |
|
|
|
(2,412 |
) |
|
|
- |
|
Total |
|
$ |
652,217 |
|
|
$ |
576,478 |
|
|
|
100 |
% |
|
$ |
605,396 |
|
|
$ |
547,573 |
|
|
|
100 |
% |
4 Represents percentage of total portfolio at fair
value5 Represents the equity investment in the Asset Manager
Affiliates
Interest Rate Risk
As of December 31, 2022, the Company had $378.2
million (par value) of borrowings outstanding with a weighted
average interest rate of 6.1%, of which $108.0 million par value
had a fixed rate and $270.2 million par value had a floating rate.
This balance was comprised of $92.0 million of outstanding
borrowings under the Senior Secured Revolving Credit Facility,
$178.2 million of 2018-2 Secured Notes due 2029, and $108.0 million
of 4.875% Notes due 2026.
As of December 31, 2022 and December 31, 2021, the fair value of
investments and cash were as follows:
($ in
thousands) |
|
For the Year Ended, December 31, |
|
Security
Type |
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Cash and cash equivalents |
|
$ |
5,148 |
|
|
$ |
28,919 |
|
Restricted Cash |
|
|
27,983 |
|
|
|
39,421 |
|
Senior
Secured Loan |
|
|
418,722 |
|
|
|
364,701 |
|
Junior
Secured Loan |
|
|
56,400 |
|
|
|
70,549 |
|
Senior
Unsecured Bond |
|
|
43 |
|
|
|
43 |
|
Equity
Securities |
|
|
21,905 |
|
|
|
22,586 |
|
CLO Fund
Securities |
|
|
20,453 |
|
|
|
31,632 |
|
Asset
Manager Affiliates |
|
|
- |
|
|
|
- |
|
Joint
Ventures |
|
|
58,955 |
|
|
|
60,474 |
|
Derivatives |
|
|
- |
|
|
|
(2,412 |
) |
Total |
|
$ |
609,609 |
|
|
$ |
615,913 |
|
As of December 31, 2022, the Company had
unrestricted cash of $5.1 million and restricted cash of $28.0
million. This compares to unrestricted cash of $28.9 million and
restricted cash of $39.4 million as of December 31, 2021. As of
December 31, 2022, the Company had $23.0 million of available
borrowing capacity under the Senior Secured Revolving Credit
Facility, and no remaining borrowing capacity under the 2018-2
Secured Notes.
Interest Rate Volatility
The Company’s investment income is affected by
fluctuations in various interest rates, including LIBOR and prime
rates.
As of December 31, 2022, approximately 90.0% of
our Debt Securities Portfolio at par value were either floating
rate with a spread to an interest rate index such as LIBOR or the
prime rate. 78.8% of these floating rate loans contain LIBOR floors
ranging between 0.50% and 2.00%. We generally expect that future
portfolio investments will predominately be floating rate
investments.
In periods of rising or lowering interest rates,
the cost of the portion of debt associated with the 4.875% Notes
Due 2026 would remain the same, given that this debt is at a fixed
rate, while the interest rate on borrowings under the Revolving
Credit Facility would fluctuate with changes in interest rates.
Generally, the Company would expect that an
increase in the base rate index for floating rate investment assets
would increase gross investment income and a decrease in the base
rate index for such assets would decrease gross investment income
(in either case, such increase/decrease may be limited by interest
rate floors/minimums for certain investment assets).
|
|
Impact on net investment income froma
change in interest rates at: |
|
($ in
thousands) |
|
1% |
|
2% |
|
3% |
|
Increase
in interest rate |
|
$ |
1,963 |
|
$ |
3,927 |
|
$ |
5,890 |
|
Decrease
in interest rate |
|
$ |
(1,963 |
) |
$ |
(3,927 |
) |
$ |
(5,625 |
) |
Conference Call and Webcast
We will hold a conference call on Friday, March
10, 2023, at 9:00 am Eastern Time to discuss our fourth quarter and
full year 2022 financial results. To access the call, stockholders,
prospective stockholders and analysts should dial (800) 715-9871
approximately 10 minutes prior to the start of the conference call
and use the conference ID 9307995.
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/kad4ywz6. 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)
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Investments at fair value: |
|
|
|
|
|
Non-controlled/non-affiliated investments (amortized cost: 2022 -
$518,699; 2021 - $479,153) |
$ |
483,698 |
|
|
$ |
452,482 |
|
Non-controlled affiliated investments (amortized cost: 2022 -
$75,196; 2021 - $74,082) |
|
73,827 |
|
|
|
74,142 |
|
Controlled affiliated investments (cost: 2022 - $58,322; 2021 -
$52,130) |
|
18,953 |
|
|
|
23,361 |
|
Total
Investments at Fair Value (cost: 2022 - $652,217; 2021 -
$605,365) |
$ |
576,478 |
|
|
$ |
549,985 |
|
Cash and
cash equivalents |
|
5,148 |
|
|
|
28,919 |
|
Restricted cash |
|
27,983 |
|
|
|
39,421 |
|
Interest
receivable |
|
4,828 |
|
|
|
5,514 |
|
Receivable for unsettled trades |
|
1,395 |
|
|
|
20,193 |
|
Due from
affiliates |
|
930 |
|
|
|
507 |
|
Other
assets |
|
2,724 |
|
|
|
3,762 |
|
Total Assets |
$ |
619,486 |
|
|
$ |
648,301 |
|
LIABILITIES |
|
|
|
|
|
2018-2
Secured Notes (net of discount of: 2022 - $1,226; 2021 -
$1,403) |
$ |
176,937 |
|
|
$ |
162,460 |
|
4.875%
Notes Due 2026 (net of discount of: 2022 - $1,704; 2021 - $2,157;
net of deferred financing costs of: 2022 - $818; 2021 - $951) |
|
105,478 |
|
|
|
104,892 |
|
Great
Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of
deferred financing costs of: 2022 - $1,107; 2021 - $732) |
|
90,893 |
|
|
|
79,839 |
|
Derivative liabilities (cost: 2021 - $31) |
|
- |
|
|
|
2,412 |
|
Payable
for unsettled trades |
|
1,276 |
|
|
|
5,397 |
|
Accounts
payable, accrued expenses and other liabilities |
|
4,614 |
|
|
|
4,819 |
|
Accrued
interest payable |
|
3,722 |
|
|
|
2,020 |
|
Due to
affiliates |
|
900 |
|
|
|
1,799 |
|
Management and incentive fees payable |
|
3,543 |
|
|
|
4,541 |
|
Total Liabilities |
$ |
387,363 |
|
|
$ |
368,179 |
|
NET ASSETS |
|
|
|
|
|
Common
stock, par value $0.01 per share, 20,000,000 common shares
authorized; 9,916,856 issued, and 9,581,536 outstanding at
December 31, 2022, and 9,867,998 issued, and 9,699,695
outstanding at December 31, 2021 |
$ |
96 |
|
|
$ |
97 |
|
Capital
in excess of par value |
|
736,784 |
|
|
|
733,095 |
|
Total
distributable (loss) earnings |
|
(504,757 |
) |
|
|
(453,070 |
) |
Total Net Assets |
$ |
232,123 |
|
|
$ |
280,122 |
|
Total Liabilities and Net Assets |
$ |
619,486 |
|
|
$ |
648,301 |
|
Net
Asset Value Per Common Share (1) |
$ |
24.23 |
|
|
$ |
28.88 |
|
(1) 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)
|
|
For the Year Ended December 31, |
|
|
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
INVESTMENT INCOME |
|
|
|
|
|
|
|
|
|
|
Interest
income: |
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
51,090 |
|
|
$ |
60,236 |
|
|
$ |
24,335 |
|
|
Non-controlled affiliated investments |
|
|
3,150 |
|
|
|
4,775 |
|
|
|
7,416 |
|
|
Total interest income |
|
$ |
54,240 |
|
|
$ |
65,011 |
|
|
$ |
31,751 |
|
|
Payment-in-kind income: |
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
4,950 |
|
|
$ |
3,355 |
|
|
$ |
3,218 |
|
|
Non-controlled affiliated investments |
|
|
477 |
|
|
|
166 |
|
|
|
- |
|
|
Controlled affiliated investments |
|
|
181 |
|
|
|
- |
|
|
|
- |
|
|
Total payment-in-kind income |
|
$ |
5,608 |
|
|
$ |
3,521 |
|
|
$ |
3,218 |
|
|
Dividend
income: |
|
|
|
|
|
|
|
|
|
|
Non-controlled affiliated investments |
|
$ |
4,450 |
|
|
$ |
4,006 |
|
|
$ |
2,649 |
|
|
Controlled affiliated investments |
|
|
4,141 |
|
|
|
5,170 |
|
|
|
4,263 |
|
|
Total dividend income |
|
$ |
8,591 |
|
|
$ |
9,176 |
|
|
$ |
6,912 |
|
|
Fees and
other income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
1,135 |
|
|
$ |
4,006 |
|
|
$ |
2,649 |
|
|
Non-controlled affiliated investments |
|
|
40 |
|
|
|
5,170 |
|
|
|
4,263 |
|
|
Total fees and other income |
|
$ |
1,175 |
|
|
$ |
9,176 |
|
|
$ |
6,912 |
|
|
Interest
from cash and time deposits |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
15 |
|
|
Total investment income |
|
$ |
69,614 |
|
|
$ |
80,086 |
|
|
$ |
42,764 |
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
Management fees |
|
$ |
8,349 |
|
|
$ |
7,916 |
|
|
$ |
4,579 |
|
|
Performance-based incentive fees |
|
|
6,126 |
|
|
|
7,075 |
|
|
|
4,858 |
|
|
Interest and amortization of debt issuance costs |
|
|
17,701 |
|
|
|
13,644 |
|
|
|
10,284 |
|
|
Professional fees |
|
|
3,400 |
|
|
|
3,660 |
|
|
|
2,836 |
|
|
Administrative services expense |
|
|
3,364 |
|
|
|
3,219 |
|
|
|
1,941 |
|
|
Other general and administrative expenses |
|
|
1,784 |
|
|
|
2,568 |
|
|
|
1,823 |
|
|
Total expenses |
|
$ |
40,724 |
|
|
$ |
38,082 |
|
|
$ |
26,321 |
|
|
Management and performance-based incentive fees waived |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(557 |
) |
|
Net expenses |
|
$ |
40,724 |
|
|
$ |
38,082 |
|
|
$ |
25,764 |
|
|
NET INVESTMENT INCOME |
|
$ |
28,890 |
|
|
$ |
42,004 |
|
|
$ |
17,000 |
|
|
Realized And Unrealized Gains (Losses) On
Investments: |
|
|
|
|
|
|
|
|
|
|
Net
realized gains (losses) from investment transactions |
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
(28,893 |
) |
|
$ |
(4,397 |
) |
|
$ |
7,120 |
|
|
Non-controlled affiliated investments |
|
|
(197 |
) |
|
|
139 |
|
|
|
485 |
|
|
Derivatives |
|
|
(2,095 |
) |
|
|
- |
|
|
|
- |
|
|
Net realized gain (loss) on investments |
|
$ |
(31,185 |
) |
|
$ |
(4,258 |
) |
|
$ |
7,605 |
|
|
Net
change in unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
(8,298 |
) |
|
$ |
(8,047 |
) |
|
$ |
21,366 |
|
|
Non-controlled affiliated investments |
|
|
(1,428 |
) |
|
|
282 |
|
|
|
(11,723 |
) |
|
Controlled affiliated investments |
|
|
(10,601 |
) |
|
|
625 |
|
|
|
(1,755 |
) |
|
Derivatives |
|
|
2,412 |
|
|
|
(1,303 |
) |
|
|
(1,075 |
) |
|
Net unrealized gain (loss) on investments |
|
$ |
(17,915 |
) |
|
$ |
(8,443 |
) |
|
$ |
6,813 |
|
|
Tax
(provision) benefit on realized and unrealized (gains) losses on
investments |
|
$ |
(786 |
) |
|
|
(1,442 |
) |
|
|
- |
|
|
Net realized and unrealized appreciation (depreciation) on
investments, net of taxes |
|
$ |
(49,886 |
) |
|
|
(14,143 |
) |
|
|
14,418 |
|
|
Realized
gains (losses) on extinguishments of debt |
|
$ |
- |
|
|
|
(1,835 |
) |
|
|
155 |
|
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS |
|
$ |
(20,996 |
) |
|
$ |
26,026 |
|
|
$ |
31,573 |
|
|
Net Increase (Decrease) In Net Assets Resulting from Operations per
Common Share (1): |
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
(2.18 |
) |
|
$ |
3.05 |
|
|
$ |
6.32 |
|
|
Net Investment Income Per Common Share (1): |
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
3.00 |
|
|
$ |
4.92 |
|
|
$ |
3.40 |
|
|
Weighted Average Shares of Common Stock Outstanding—Basic and
Diluted (1) |
|
|
9,634,468 |
|
|
|
8,536,079 |
|
|
|
4,998,759 |
|
|
(1) The Company completed a Reverse Stock Split
of 10 to 1 effective August 26, 2021, the weighted average shares
outstanding and per share values have been adjusted retroactively
to reflect the split for all periods presented.
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