PennantPark Investment Corporation (NYSE: PNNT) announced today
financial results for the first quarter ended December 31, 2022.
HIGHLIGHTS Quarter ended December
31, 2022 (Unaudited) ($ in millions, except per share amounts)
Assets and
Liabilities: |
|
|
|
Investment portfolio(1) |
|
$ |
1,196.0 |
|
Net assets |
|
$ |
502.9 |
|
GAAP net asset value per share |
|
$ |
7.71 |
|
Quarterly decrease in GAAP net asset value per share |
|
|
(14.1 |
)% |
Adjusted net asset value per share(2) |
|
$ |
7.60 |
|
Quarterly decrease in adjusted net asset value per share(2) |
|
|
(15.4 |
)% |
|
|
|
|
Credit
Facility |
|
$ |
367.3 |
|
2026
Notes |
|
$ |
147.0 |
|
2026-2
Notes |
|
$ |
161.6 |
|
SBA
Debentures |
|
$ |
19.7 |
|
Regulatory
Debt to Equity |
|
1.41x |
|
Weighted
average yield on debt investments at quarter-end |
|
|
11.9 |
% |
|
|
|
|
Operating
Results: |
|
|
|
Net investment income |
|
$ |
10.3 |
|
Net investment income per share |
|
$ |
0.16 |
|
Distributions declared per share |
|
$ |
0.165 |
|
|
|
|
|
Portfolio
Activity: |
|
|
|
Purchases of investments |
|
$ |
86.2 |
|
Sales and repayments of investments |
|
$ |
30.6 |
|
|
|
|
|
PSLF
Portfolio data: |
|
|
|
PSLF investment portfolio |
|
$ |
734.7 |
|
Purchases of investments |
|
$ |
16.8 |
|
Sales and repayments of investments |
|
$ |
9.0 |
|
______________________
- Includes investments in PennantPark
Senior Loan Fund, LLC, or PSLF, an unconsolidated joint venture,
totaling $149.2 million, at fair value.
- This is a non-GAAP financial
measure. The Company believes that this number provides useful
information to investors and management because it reflects the
Company’s financial performance excluding the impact of $7.5
million, or $0.11 per share, unrealized gain on our multi-currency,
senior secured revolving credit facility with Truist Bank, as
amended, the “Credit Facility." The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for financial results prepared in accordance with
GAAP.
CONFERENCE CALL AT 12:00 P.M. EST ON
February 9, 2023
PennantPark Investment Corporation (“we,” “our,”
“us” or the “Company”) will also host a conference call at 12:00
p.m. (Eastern Time) on Thursday, February 9, 2023 to discuss its
financial results. All interested parties are welcome to
participate. You can access the conference call by dialing
toll-free (888) 394-8218 approximately 5-10 minutes prior to the
call. International callers should dial (646) 828-8193. All callers
should reference conference ID #1078579 or PennantPark Investment
Corporation. An archived replay will also be available on a webcast
link located on the Quarterly Earnings page Investor section of
PennantPark’s website.
INCREASE OF QUARTERLY DISTRIBUTION TO
$0.185 PER SHARE
The Company declares a distribution of $0.185
per share, an increase of 12.1% from the most recent distribution.
The distribution is payable on April 3, 2023 to stockholders of
record as of March 16, 2023. The distribution is expected to be
paid from taxable net investment income. The final specific tax
characteristics of the distribution will be reported to
stockholders on Form 1099 after the end of the calendar year and in
the Company’s periodic report filed with the Securities and
Exchange Commission.
“We are pleased to announce a substantial
increase in our quarterly dividend, which is well covered by our
run rate net investment income,” said Arthur Penn, Chairman and
CEO. “The past quarter was pivotal in our transition to a more
stable, higher earning and higher dividend paying BDC. We have a
portfolio that is primarily floating rate senior secured first lien
debt and is positioned to perform well in this environment. With
the conclusion of our transition from legacy investments, we can
move forward strongly with the investment strategy that has served
us well over the past seven years.”
PORTFOLIO AND INVESTMENT
ACTIVITY
As of December 31, 2022, our portfolio totaled
$1,196.0 million, which consisted of $661.2 million of first lien
secured debt, $130.8 million of second lien secured debt, $148.6
million of subordinated debt (including $95.4 million in PSLF) and
$255.4 million of preferred and common equity (including $53.8
million in PSLF). Our debt portfolio consisted of 96% variable-rate
investments and 4% fixed-rate investments. As of December 31, 2022,
we had two portfolio companies on non-accrual, representing 2.7%
and 1.1% of our overall portfolio on a cost and fair value basis,
respectively. Overall, the portfolio had net unrealized
depreciation of $167.5 million as of December 31, 2022. Our overall
portfolio consisted of 125 companies with an average investment
size of $9.6 million, and a weighted average yield on interest
bearing debt investments of 11.9%
As of September 30, 2022, our portfolio totaled
$1,226.3 million and consisted of $631.0 million of first lien
secured debt, $129.9 million of second lien secured debt, $141.3
million of subordinated debt (including $88.0 million in PSLF) and
$324.1 million of preferred and common equity (including $51.1
million in PSLF). Our interest bearing debt portfolio consisted of
96% variable-rate investments and 4% fixed-rate investments. As of
September 30, 2022, we had one portfolio company on non-accrual,
representing 1% and zero percent of our overall portfolio on a cost
and fair value basis, respectively. Overall, the portfolio had net
unrealized depreciation of $71.0 million as of September 30, 2022.
Our overall portfolio consisted of 123 companies with an average
investment size of $10.1 million, and a weighted average yield on
interest bearing debt investments of 10.8 %.
For the three months ended December 31, 2022, we
invested $86.2 million in six new and 29 existing portfolio
companies with a weighted average yield on debt investments of
11.2%. Sales and repayments of investments for the three months
ended December 31, 2022 totaled $30.6 million.
For the three months ended December 31, 2021, we
invested $295.1 million in 15 new and 30 existing portfolio
companies with a weighted average yield on debt investments of
8.1%. Sales and repayments of investments for the three months
ended December 31, 2021 totaled $132.2 million.
PennantPark Senior Loan Fund,
LLC
As of December 31, 2022, PSLF’s portfolio
totaled $734.7 million, consisted of 83 companies with an average
investment size of $8.9 million and had a weighted average yield on
debt investments of 10.6 %.
As of September 30, 2022, PSLF’s portfolio
totaled $730.1 million, consisted of 80 companies with an average
investment size of $9.1 million and had a weighted average yield on
debt investments of 9.4%.
For the three months ended December 31, 2022,
PSLF invested $16.8 million (of which none were purchased from the
Company) in four new and four existing portfolio companies with a
weighted average yield on debt investments of 11.4%. PSLF’s sales
and repayments of investments for the same period totaled $9.0
million.
For the three months ended December 31, 2021,
PSLF invested $50.7 million (of which $48.1million was purchased
from the Company) in nine new and two existing portfolio companies
with a weighted average yield on debt investments of 7.5%. PSLF’s
sales and repayments of investments for the same period totaled
$35.6 million.
RESULTS OF OPERATIONS
Set forth below are the results of operations
during the three months ended December 31, 2022 and 2021.
Investment Income
For the three months ended December 31, 2022,
investment income was $30.0 million, which was attributable to
$21.8 million from first lien secured debt, $3.8 million from
second lien secured debt, $1.1 million from subordinated debt and
$3.3 million from preferred and common equity. For the three months
ended December 31, 2021, investment income was $28.3 million, which
was attributable to $20.1 million from first lien secured debt,
$4.5 million from second lien secured debt, $1.9 million from
subordinated debt and $1.8 million from preferred and common
equity. The increase in investment income compared to the same
period in the prior year was primarily due to the increase in the
cost yield of our debt portfolio.
Net Expenses
For the three months ended December 31, 2022,
expenses totaled $19.6 million and were comprised of; $9.7 million
of debt related interest and expenses, $4.6 million of base
management fees, $2.2 million of performance based $1.1 million of
general and administrative expenses and $2.0 million of provision
for excise taxes. For the three months ended December 31, 2021,
expenses totaled $15.8 and were comprised of; $6.9 million of
debt-related interest and expenses, $5.1 million of base management
fees, $2.6 million of performance based, incentive fees, $1.0
million of general and administrative expenses and $0.2 million of
provision for excise taxes. The increase in provision for excise
taxes was primarily due to the increase undistributed taxable
income as of December 31, 2022 compared to the same period in the
prior year.
Net Investment Income
For the three months ended December 31, 2022 and
2021, net investment income totaled $10.3 million, or $0.16 per
share, and $12.5 million, or $0.19 per share, respectively. The
decrease in net investment income compared to the same period in
the prior year was primarily due to an increase in debt related
interest and expenses and an increase in the provision for excise
tax.
Net Realized Gains or
Losses
For the three months ended December 31, 2022 and
2021, net realized gains (losses) totaled $4.1 million and $(26.1)
million, respectively. The change in realized gains (losses) was
primarily due to changes in the market conditions of our
investments and the values at which they were realized.
Unrealized Appreciation or Depreciation
on Investments and Debt
For the three months ended December 31, 2022 and
2021, we reported net change in unrealized appreciation
(depreciation) on investments of $(91.6) million and $46.8 million,
respectively. As of December 31, 2022 and September 30, 2022, our
net unrealized appreciation (depreciation) on investments totaled
$(167.5) million and $(75.7) million, respectively. The net change
in unrealized depreciation on our investments compared to the same
period in the prior year was primarily due to changes in the
capital market conditions of our investments and the values at
which they were realized.
For the three months ended December 31, 2022 and
2021, the Truist Credit Facility had a net change in unrealized
(appreciation) depreciation of $4.4 million and $(1.0) million,
respectively. As of December 31, 2022 and September 30, 2022, the
net unrealized depreciation on the Truist Credit Facility totaled
$13.6 million and $9.2 million, respectively. The net change in
unrealized depreciation compared to the same periods in the prior
year was primarily due to changes in the capital markets.
Net Increase (Decrease) in Net Assets
Resulting from Operations
For the three months ended December 31, 2022 and
2021, net increase (decrease) in net assets resulting from
operations totaled $(71.9) million, or $(1.10) per share and $25.5
million, or $0.38 per share, respectively.
LIQUIDITY AND CAPITAL
RESOURCES
Our liquidity and capital resources are derived
primarily from cash flows from operations, including investment
sales and repayments, and income earned, proceeds of securities
offerings and debt financings. Our primary use of funds from
operations includes investments in portfolio companies and payments
of interest expense, fees and other operating expenses we incur. We
have used, and expect to continue to use, our debt capital,
proceeds from the rotation of our portfolio and proceeds from
public and private offerings of securities to finance our
investment objectives and operations.
For the three months ended December 31, 2022 and
2021, the annualized weighted average cost of debt inclusive of the
fee on the undrawn commitment and amendment costs on the Truist
Credit Facility, and amortized upfront fees on SBA debentures, was
5.6% and 4.0%, respectively. As of December 31, 2022 and September
30, 2022, we had $119.1 million and $114.1 million of unused
borrowing capacity under the Truist Credit Facility, respectively,
subject to leverage and borrowing base restrictions.
As of December 31, 2022 and September 30, 2022,
we had $380.9 million and $385.9 million, in outstanding borrowings
under the Truist Credit Facility, respectively and the weighted
average interest rate of 6.6% and 5.3%, respectively.
As of December 31, 2022 and September 30, 2022,
we had cash and cash equivalents of $28.6 million and $52.7
million, respectively, available for investing and general
corporate purposes. We believe our liquidity and capital resources
are sufficient to allows us to effectively operate our
business.
For the three months ended December 31, 2022,
our operating activities used cash of $9.6 million and our
financing activities used cash of $14.8 million. Our operating
activities used cash primarily due to our investment activities and
our financing activities used cash primarily due to repayments
under the Truist Credit Facility.
For the three months ended December 31, 2021,
our operating activities used cash of $177.4 million, and our
financing activities provided cash of $196.6 million. Our operating
activities used cash primarily due to our investment activities and
our financing activities provided cash primarily due to the
issuance of the 2026 Notes-2 and borrowings under the Truist Credit
Facility.
SHARE REPURCHASE PROGRAM
On February 9, 2022, we announced a share
repurchase program which allows us to repurchase up to $25 million
of our outstanding common stock in the open market at prices below
our net asset value as reported in our then most recently published
consolidated financial statements. The shares may be purchased from
time to time at prevailing market prices, through open market
transactions, including block transactions. Unless extended by our
board of directors, the program, which may be implemented at the
discretion of management, will expire on the earlier of March 31,
2023 and the repurchase of $25 million of common stock. During the
three months ended December 31, 2022 and 2021, we did not make any
repurchases of shares of our common stock, respectively.
DISTRIBUTIONS
During the three months ended December 31, 2022,
we declared distributions of $0.165 per share, for total
distributions of $10.8 million. For the same periods in the prior
year, we declared distributions of $0.12 per share, for total
distributions of $8.0 million. We monitor available net investment
income to determine if a return of capital for tax purposes may
occur for the fiscal year. To the extent our taxable earnings fall
below the total amount of our distributions for any given fiscal
year, stockholders will be notified of the portion of those
distributions deemed to be a tax return of capital. Tax
characteristics of all distributions will be reported to
stockholders subject to information reporting on Form 1099-DIV
after the end of each calendar year and in our periodic reports
filed with the SEC.
AVAILABLE INFORMATION
The Company makes available on its website its
annual report on Form 10-K filed with the SEC and stockholders may
find the report on our website at www.pennantpark.com.
PENNANTPARK INVESTMENT CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES (In thousands, except share data)
|
|
December 31, 2022(Unaudited) |
|
|
September 30, 2022 |
|
Assets |
|
|
|
|
|
|
Investments
at fair value |
|
|
|
|
|
|
Non-controlled, non-affiliated investments (cost—$929,937 and
$882,513 respectively) |
|
$ |
928,888 |
|
|
$ |
932,155 |
|
Non-controlled, affiliated investments (cost— $38,431 and $37,612,
respectively) |
|
|
35,579 |
|
|
|
34,760 |
|
Controlled, affiliated investments (cost— $395,134 and $381,904,
respectively) |
|
|
231,568 |
|
|
|
259,386 |
|
Total of investments (cost—$1,363,502 and $1,302,029,
respectively) |
|
|
1,196,035 |
|
|
|
1,226,301 |
|
Cash and
cash equivalents (cost—$28,558 and $52,844, respectively) |
|
|
28,556 |
|
|
|
52,666 |
|
Interest
receivable |
|
|
4,124 |
|
|
|
3,593 |
|
Receivable
for investments sold |
|
|
— |
|
|
|
29,494 |
|
Distributions receivable |
|
|
3,256 |
|
|
|
2,420 |
|
Prepaid
expenses and other assets |
|
|
4,036 |
|
|
|
4,036 |
|
Total assets |
|
|
1,236,007 |
|
|
|
1,318,510 |
|
Liabilities |
|
|
|
|
|
|
Distributions payable |
|
|
10,762 |
|
|
|
9,784 |
|
Payable for
investments purchased |
|
|
8,325 |
|
|
|
— |
|
Credit
Facility payable, at fair value (cost—$380,920 and $385,920,
respectively) |
|
|
367,308 |
|
|
|
376,687 |
|
2026 Notes
payable, net (par—$150,000, respectively) |
|
|
146,993 |
|
|
|
146,767 |
|
2026 Notes-2
payable, net (par—$165,000, respectively) |
|
|
161,586 |
|
|
|
161,373 |
|
SBA
Debentures payable, net (par—$20,000, respectively) |
|
|
19,701 |
|
|
|
19,686 |
|
Base-management fee payable, net |
|
|
4,602 |
|
|
|
4,849 |
|
Incentive
fee payable |
|
|
2,192 |
|
|
|
— |
|
Interest
payable on debt |
|
|
3,291 |
|
|
|
6,264 |
|
Accrued
other expenses |
|
|
2,155 |
|
|
|
6,639 |
|
Current tax
liability |
|
|
6,183 |
|
|
|
896 |
|
Total liabilities |
|
|
733,098 |
|
|
|
732,945 |
|
Commitments
and contingencies |
|
|
|
|
|
|
Net
assets |
|
|
|
|
|
|
Common
stock, 65,224,500 shares issued and outstanding, Par value $0.001
per share and 100,000,000 shares authorized |
|
|
65 |
|
|
|
65 |
|
Paid-in
capital in excess of par value |
|
|
748,169 |
|
|
|
748,169 |
|
Accumulated
deficit |
|
|
(245,325 |
) |
|
|
(162,669 |
) |
Total net assets |
|
$ |
502,909 |
|
|
$ |
585,565 |
|
Total liabilities and net assets |
|
$ |
1,236,007 |
|
|
$ |
1,318,510 |
|
Net
asset value per share |
|
$ |
7.71 |
|
|
$ |
8.98 |
|
|
|
|
|
|
|
|
|
|
PENNANTPARK INVESTMENT CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except share data)
|
|
Three Months EndedDecember
31,(Unaudited) |
|
|
|
2022 |
|
|
2021 |
|
Investment income: |
|
|
|
|
|
|
From
non-controlled, non-affiliated investments: |
|
|
|
|
|
|
Interest |
|
$ |
22,231 |
|
|
$ |
15,540 |
|
Payment-in-kind |
|
|
— |
|
|
|
2,410 |
|
Other income |
|
|
487 |
|
|
|
4,191 |
|
From
controlled, affiliated investments: |
|
|
|
|
|
|
Interest |
|
|
2,858 |
|
|
|
2,267 |
|
Payment-in-kind |
|
|
1,131 |
|
|
|
2,126 |
|
Other Income |
|
|
3,256 |
|
|
|
1,815 |
|
Total investment income |
|
|
29,963 |
|
|
|
28,349 |
|
Expenses: |
|
|
|
|
|
|
Base management fee |
|
|
4,602 |
|
|
|
5,109 |
|
Performance-based incentive fee |
|
|
2,192 |
|
|
|
2,657 |
|
Interest and expenses on debt |
|
|
9,729 |
|
|
|
6,886 |
|
Administrative services expenses |
|
|
266 |
|
|
|
250 |
|
Other general and administrative expenses |
|
|
841 |
|
|
|
723 |
|
Expenses before provision for taxes |
|
|
17,630 |
|
|
|
15,625 |
|
Provision for taxes on net investment income |
|
|
2,000 |
|
|
|
200 |
|
Net expenses |
|
|
19,630 |
|
|
|
15,825 |
|
Net investment income |
|
|
10,333 |
|
|
|
12,524 |
|
Realized and unrealized gain (loss) on investments and
debt: |
|
|
|
|
|
|
Net realized
gain (loss) on investments and debt: |
|
|
|
|
|
|
Non-controlled, non-affiliated investments |
|
|
4,064 |
|
|
|
5,201 |
|
Non-controlled and controlled, affiliated investments |
|
|
— |
|
|
|
(31,274 |
) |
Debt extinguishment |
|
|
— |
|
|
|
(1,669 |
) |
Net realized gain (loss) on investments and
debt |
|
|
4,064 |
|
|
|
(27,742 |
) |
Net change
in unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
Non-controlled, non-affiliated investments |
|
|
(50,517 |
) |
|
|
(49,603 |
) |
Non-controlled and controlled, affiliated investments |
|
|
(41,048 |
) |
|
|
96,372 |
|
Provision for taxes on unrealized appreciation (depreciation) on
investments |
|
|
896 |
|
|
|
(5,045 |
) |
Debt (appreciation) depreciation |
|
|
4,378 |
|
|
|
(996 |
) |
Net change in unrealized appreciation (depreciation) on
investments and debt |
|
|
(86,291 |
) |
|
|
40,728 |
|
Net
realized and unrealized gain (loss) from investments and
debt |
|
|
(82,227 |
) |
|
|
12,986 |
|
Net
increase (decrease) in net assets resulting from
operations |
|
|
(71,894 |
) |
|
|
25,510 |
|
Net
increase (decrease) in net assets resulting from operations per
common share |
|
$ |
(1.10 |
) |
|
$ |
0.38 |
|
Net
investment income per common share |
|
$ |
0.16 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
ABOUT PENNANTPARK INVESTMENT
CORPORATION
PennantPark Investment Corporation is a business
development company which invests primarily in U.S. middle-market
companies in the form of first lien secured debt, second lien
secured debt, subordinated debt and equity investments. PennantPark
Investment Corporation is managed by PennantPark Investment
Advisers, LLC.
ABOUT PENNANTPARK INVESTMENT ADVISERS,
LLC
PennantPark Investment Advisers, LLC is a
leading middle market credit platform, managing $6.1 billion of
investable capital, including potential leverage. Since its
inception in 2007, PennantPark Investment Advisers, LLC has
provided investors access to middle market credit by offering
private equity firms and their portfolio companies as well as other
middle-market borrowers a comprehensive range of creative and
flexible financing solutions. PennantPark Investment Advisers, LLC
is headquartered in Miami and has offices in New York, Chicago,
Houston, and Los Angeles.
FORWARD-LOOKING STATEMENTS
This press release may contain “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. You should understand that under Section
27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section
21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995 do not apply to
forward-looking statements made in periodic reports PennantPark
Investment Corporation files under the Exchange Act. All statements
other than statements of historical facts included in this press
release are forward-looking statements and are not guarantees of
future performance or results and involve a number of risks and
uncertainties. Actual results may differ materially from those in
the forward-looking statements as a result of a number of factors,
including those described from time to time in filings with the
SEC. PennantPark Investment Corporation undertakes no duty to
update any forward-looking statement made herein. You should not
place undue influence on such forward-looking statements as such
statements speak only as of the date on which they are made.
We may use words such as “anticipates,”
“believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” 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.
The information contained herein is based on
current tax laws, which may change in the future. The Company
cannot be held responsible for any direct or incidental loss
resulting from applying any of the information provided in this
publication or from any other source mentioned. The information
provided in this material does not constitute any specific legal,
tax or accounting advice. Please consult with qualified
professionals for this type of advice.
Contact: |
Richard T. Allorto, Jr. |
|
PennantPark Investment Corporation |
|
(212) 905-1000 |
|
www.pennantpark.com |
PennantPark Investment (NYSE:PNNT)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
PennantPark Investment (NYSE:PNNT)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024