MIAMI, Feb. 07, 2024 (GLOBE NEWSWIRE) — PennantPark Investment Corporation (NYSE:PNNT) announced today its financial results for the first quarter ended December 31, 2023.
HIGHLIGHTS
Quarter ended December 31, 2023 (unaudited)
($ in millions, except per share amounts)
Assets and Liabilities:
Investment portfolio (1)
$
1,210.8
Net assets
$
499.1
GAAP net asset value per share
$
7.65
Quarterly decrease in GAAP net asset value per share
(0.6
)%
Adjusted net asset value per share (2)
$
7.65
Quarterly decrease in adjusted net asset value per share (2)
(0.6
)%
Credit Facility
$
385.0
2026 Notes
$
147.9
2026-2 Notes
$
162.4
Regulatory debt to equity
1.41x
Weighted average yield on debt investments
12.6
%
Operating Results:
Net investment income
$
15.7
Net investment income per share
$
0.24
Core net investment income per share (3)
$
0.24
Distributions declared per share
$
0.21
Portfolio Activity:
Purchases of investments*
$
231.1
Sales and repayments of investments*
$
71.0
PSLF Portfolio data:
PSLF investment portfolio
$
857.9
Purchases of investments
$
81.0
Sales and repayments of investments
$
29.1
_____________________
* excludes U.S. Government Securities
Includes investments in PennantPark Senior Loan Fund, LLC (“PSLF”), an unconsolidated joint venture, totaling $165.1 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 unrealized gain on the Company’s 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.
Core net investment income (“Core NII”) is a non-GAAP financial measure. The Company believes that Core NII provides useful information to investors and management because it reflects the Company’s financial performance excluding one-time or non-recurring investment income and expenses. 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. For the quarter ended December 31, 2023, there were no one-time events, resulting in $0.24 of Core NII.
CONFERENCE CALL AT 12:00 P.M. EST ON FEBRUARY 8, 2024
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 8, 2024 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 #2627395 or PennantPark Investment Corporation. An archived replay will also be available on a webcast link located on the Quarterly Earnings page in the Investor section of PennantPark’s website.
PORTFOLIO AND INVESTMENT ACTIVITY
“We are pleased to announce another quarter of solid net investment income, which is in excess of our dividend by a healthy margin,” said Arthur Penn, Chairman and CEO. “Our earnings stream continues to be robust and is driven in part by the excellent returns generated by our PSLF Joint Venture.”
As of December 31, 2023, our portfolio totaled $1,210.8 million, which consisted of $677.7 million or 56% of first lien secured debt, $49.8 million or 4% of U.S. Government Securities, $78.4 million or 7% of second lien secured debt, $151.1 million or 12% of subordinated debt (including $102.3 million or 8% in PSLF) and $253.7 million or 21% of preferred and common equity (including $62.8 million or 5% in PSLF). Our debt portfolio consisted of 96% variable-rate investments and 4% fixed-rate investments. As of December 31, 2023, we had one portfolio company on non-accrual, representing 1.0% and zero of our overall portfolio on a cost and fair value basis, respectively. As of December 31, 2023, the portfolio had net unrealized depreciation of $(21.3) million. Our overall portfolio consisted of 139 companies with an average investment size of $8.4 million, and a weighted average yield on interest bearing debt investments of 12.6%.
As of September 30, 2023, our portfolio totaled $1,101.7 million and consisted of $527.7 million or 48% of first lien secured debt, $99.8 million or 9% of U.S. Government Securities, $80.4 million or 7% of second lien secured debt, $156.2 million or 14% of subordinated debt (including $102.3 million or 9% in PSLF) and $237.6 million or 22% of preferred and common equity (including $62.1 million or 6% in PSLF). Our interest bearing debt portfolio consisted of 95% variable-rate investments and 5% fixed-rate investments. As of September 30, 2023, we had one portfolio company on non-accrual, representing 1.2% and zero percent of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $(16.3) million as of September 30, 2023. Our overall portfolio consisted of 129 companies with an average investment size of $7.8 million, had a weighted average yield on interest bearing debt investments of 13.0%.
For the three months ended December 31, 2023, we invested $231.1 million in 12 new and 32 existing portfolio companies at a weighted average yield on debt investments of 11.9% (excluding U.S. Government Securities). For the three months ended December 31, 2023, sales and repayments of investments totaled $71.0 million (excluding U.S. Government Securities).
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%. For the three months ended December 31, 2022, sales and repayments of investments totaled $30.6 million.
PennantPark Senior Loan Fund, LLC
As of December 31, 2023, PSLF’s portfolio totaled $857.9 million, consisted of 93 companies with an average investment size of $9.2 million and had a weighted average yield on debt investments of 12.1%.
As of September 30, 2023, PSLF’s portfolio totaled $804.2 million, consisted of 90 companies with an average investment size of $8.9 million and had a weighted average yield on debt investments of 12.1%.
For the three months ended December 31, 2023, PSLF invested $81.0 million (including $50.8 million were purchased from the Company) in five new and seven existing portfolio companies at weighted average yield interest bearing debt investments of 12.7%. PSLF’s sales and repayments of investments for the same period totaled $29.1 million.
For the three months ended December 31, 2022, PSLF invested $16.8 million (of which none was purchased from the Company) in four new and four existing portfolio companies at weighted average yield on interest bearing debt investments of 11.4%. PSLF’s sales and repayments of investments for the same period totaled $9.0 million.
RESULTS OF OPERATIONS
Set forth below are the results of operations during the three months ended December 31, 2023 and 2022.
Investment Income
For the three months ended December 31, 2023, investment income was $34.3 million, which was attributable to $25.1 million from first lien secured debt, $2.6 million from second lien secured debt, $1.3 million from subordinated debt and $5.3 million from preferred and common equity, respectively. 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, respectively. The increase in investment income compared to the same period in the prior year was primarily due to the increase in the cost of yield of our debt portfolio.
Expenses
For the three months ended December 31, 2023, expenses totaled $18.7 million and were comprised of; $9.6 million of debt related interest and expenses, $4.0 million of base management fees, $3.3 million of performance based incentive fees, $1.4 million of general and administrative expenses and $0.4 million of provision for excise taxes. 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 incentive fees, $1.1 million of general and administrative expenses and $2.0 million of provision for excise taxes, respectively. The decrease in net expense was primarily due to the provision for excise taxes compared to the same period in the prior year.
Net Investment Income
For the three months ended December 31, 2023 and 2022, net investment income totaled $15.7 million, or $0.24 per share, and $10.3 million, or $0.16 per share, respectively. The increase in net investment income compared to the same period in the prior year was primarily due to an increase in investment income which was driven by increased dividends and interest income as a result of an increase in the cost yield of our debt portfolio.
Net Realized Gains or Losses
For the three months ended December 31, 2023, and 2022, net realized gains (losses) totaled $1.8 million and $4.1 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, 2023 and 2022, we reported net change in unrealized appreciation (depreciation) on investments of $(5.0) million and $(91.6) million, respectively. As of December 31, 2023 and September 30, 2023, the net unrealized appreciation (depreciation) on investments totaled $(21.3) million and $(16.3) 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, 2023 and 2022, the Truist Credit Facility had a net change in unrealized (appreciation) depreciation of $(2.0) million and $4.4 million, respectively. As of December 31, 2023 and September 30, 2023, the net unrealized depreciation on the Truist Credit Facility totaled $3.4 million and $5.5 million, respectively. Net change in unrealized appreciation compared to the same periods in the prior period was primarily due to changes in the capital markets.
Net Change in Net Assets Resulting from …
Leave a Reply