Horizon Technology Finance Announces Third Quarter 2024 Financial Results
Horizon Technology Finance (NASDAQ: HRZN) reported third quarter 2024 financial results with net investment income of $11.8 million ($0.32 per share), down from $17.4 million ($0.53 per share) in Q3 2023. The total investment portfolio reached $684.0 million, with a debt portfolio yield of 15.9%. The company funded nine loans totaling $93.1 million and raised $18.4 million through ATM offerings. Net asset value was $342.5 million ($9.06 per share). The company declared monthly distributions of $0.11 per share through March 2025, with undistributed spillover income of $1.27 per share.
Horizon Technology Finance (NASDAQ: HRZN) ha riportato i risultati finanziari del terzo trimestre 2024, con un reddito netto da investimenti di 11,8 milioni di dollari (0,32 dollari per azione), in calo rispetto ai 17,4 milioni di dollari (0,53 dollari per azione) del Q3 2023. Il portafoglio totale degli investimenti ha raggiunto i 684,0 milioni di dollari, con un rendimento del portafoglio di debito del 15,9%. L'azienda ha finanziato nove prestiti per un totale di 93,1 milioni di dollari e ha raccolto 18,4 milioni di dollari tramite offerte ATM. Il valore netto degli attivi è stato di 342,5 milioni di dollari (9,06 dollari per azione). L'azienda ha dichiarato distribuzioni mensili di 0,11 dollari per azione fino a marzo 2025, con un reddito di spillover non distribuito di 1,27 dollari per azione.
Horizon Technology Finance (NASDAQ: HRZN) informó los resultados financieros del tercer trimestre de 2024, con un ingreso neto por inversiones de 11,8 millones de dólares (0,32 dólares por acción), un descenso respecto a los 17,4 millones de dólares (0,53 dólares por acción) en el Q3 2023. El portafolio total de inversiones alcanzó los 684,0 millones de dólares, con un rendimiento del portafolio de deuda del 15,9%. La empresa financió nueve préstamos por un total de 93,1 millones de dólares y recaudó 18,4 millones de dólares a través de ofertas de ATM. El valor neto de los activos fue de 342,5 millones de dólares (9,06 dólares por acción). La empresa declaró distribuciones mensuales de 0,11 dólares por acción hasta marzo de 2025, con un ingreso no distribuido por spillover de 1,27 dólares por acción.
Horizon Technology Finance (NASDAQ: HRZN)는 2024년 3분기 재무 결과를 보고했으며, 순 투자 수익이 1,180만 달러(주당 0.32달러)로, 2023년 3분기의 1,740만 달러(주당 0.53달러)에서 감소했습니다. 총 투자 포트폴리오는 6억 8400만 달러에 이르며, 부채 포트폴리오 수익률은 15.9%입니다. 회사는 총 9개의 대출을 9,310만 달러로 자금을 지원하였고, ATM 공모를 통해 1,840만 달러를 모금하였습니다. 순 자산 가치는 3억 4,250만 달러(주당 9.06달러)였습니다. 회사는 2025년 3월까지 주당 0.11달러의 월 배당금을 선언하였으며, 배당되지 않은 spillover 수익은 주당 1.27달러입니다.
Horizon Technology Finance (NASDAQ: HRZN) a publié les résultats financiers du troisième trimestre 2024, avec un revenu net d'investissement de 11,8 millions de dollars (0,32 dollar par action), en baisse par rapport à 17,4 millions de dollars (0,53 dollar par action) au T3 2023. Le portefeuille total d’investissements a atteint 684,0 millions de dollars, avec un rendement du portefeuille de dette de 15,9 %. L'entreprise a financé neuf prêts totalisant 93,1 millions de dollars et a levé 18,4 millions de dollars grâce à des offres ATM. La valeur nette des actifs était de 342,5 millions de dollars (9,06 dollars par action). L'entreprise a déclaré des distributions mensuelles de 0,11 dollar par action jusqu'en mars 2025, avec un revenu de spillover non distribué de 1,27 dollar par action.
Horizon Technology Finance (NASDAQ: HRZN) hat die Finanzergebnisse des dritten Quartals 2024 mit einem Nettoinvestitionseinkommen von 11,8 Millionen Dollar (0,32 Dollar pro Aktie) veröffentlicht, im Vergleich zu 17,4 Millionen Dollar (0,53 Dollar pro Aktie) im Q3 2023. Das gesamte Investitionsportfolio erreichte 684,0 Millionen Dollar, mit einer Rendite des Schuldenportfolios von 15,9%. Das Unternehmen finanzierte neun Darlehen in Höhe von insgesamt 93,1 Millionen Dollar und sammelte 18,4 Millionen Dollar durch ATM-Angebote. Der Nettoinventarwert betrug 342,5 Millionen Dollar (9,06 Dollar pro Aktie). Das Unternehmen erklärte monatliche Ausschüttungen von 0,11 Dollar pro Aktie bis März 2025, mit nicht ausgeschüttetem Spillover-Einkommen von 1,27 Dollar pro Aktie.
- Portfolio yield remains strong at 15.9%
- Funded $93.1 million in new loans
- Raised $18.4 million through ATM offering
- Strong liquidity position with $125.2 million available
- Maintains $1.27 per share in undistributed spillover income
- Net investment income decreased to $0.32 per share from $0.53 year-over-year
- Net realized loss of $33.9 million in Q3 2024
- NAV per share declined to $9.06 from $10.41 year-over-year
- Total investment income decreased to $24.6 million from $29.1 million year-over-year
Insights
The Q3 2024 results reveal significant financial shifts for HRZN.
The portfolio quality metrics warrant attention, with
The
- Third Quarter 2024 Net Investment Income per Share of
- Debt Portfolio Yield of
- HRZN Ends Quarter with Committed Backlog of
- Declares Regular Monthly Distributions Totaling
Third Quarter 2024 Highlights
-
Net investment income (“NII”) of
$11.8 million $0.32 $17.4 million $0.53 -
Total investment portfolio of
$684.0 million -
Net asset value of
$342.5 million $9.06 -
Annualized portfolio yield on debt investments of
15.9% for the quarter -
Horizon funded nine loans totaling
$93.1 million -
Raised total net proceeds of approximately
$18.4 million - Experienced liquidity events from four portfolio companies
-
Cash of
$86.6 million $269.0 million - Held portfolio of warrant and equity positions in 103 companies as of September 30, 2024
-
Undistributed spillover income of
$1.27 -
Subsequent to quarter end, declared distributions of
$0.11
“We had a solid third quarter, as we originated a number of new, high-quality loans that returned our portfolio to quarter-over-quarter growth, while we saw the venture debt market begin to improve,” said Robert D. Pomeroy, Jr., Chairman and Chief Executive Officer of Horizon. “Our net investment income for the quarter was just
“We also further strengthened our balance sheet, raising over
Third Quarter 2024 Operating Results
Total investment income for the quarter ended September 30, 2024 was
The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended September 30, 2024 and 2023 was
Total expenses for the quarter ended September 30, 2024 were
Net investment income for the quarter ended September 30, 2024 was
For the quarter ended September 30, 2024, net realized loss on investments was
For the quarter ended September 30, 2024, net unrealized appreciation on investments was
Portfolio Summary and Investment Activity
As of September 30, 2024, the Company’s debt portfolio consisted of 53 secured loans with an aggregate fair value of
($ in thousands) |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Beginning portfolio |
$ |
646,862 |
|
$ |
715,391 |
|
$ |
709,085 |
|
$ |
720,026 |
|
|
|
|
|
|
||||||||
New debt and equity investments |
|
94,117 |
|
|
89,435 |
|
|
140,751 |
|
|
186,988 |
|
|
|
|
|
|
||||||||
Less refinanced debt balances |
|
(8,290 |
) |
|
(22,500 |
) |
|
(19,540 |
) |
|
(32,500 |
) |
|
|
|
|
|
||||||||
Net new debt and equity investments |
|
85,827 |
|
|
66,935 |
|
|
121,211 |
|
|
154,488 |
|
|
|
|
|
|
||||||||
Principal payments received on investments |
|
(12,502 |
) |
|
(9,121 |
) |
|
(34,805 |
) |
|
(22,011 |
) |
|
|
|
|
|
||||||||
Early pay-offs and principal paydowns |
|
(31,890 |
) |
|
(16,605 |
) |
|
(85,643 |
) |
|
(68,211 |
) |
|
|
|
|
|
||||||||
Payment-in-kind interest on investments |
|
379 |
|
|
3,934 |
|
|
2,114 |
|
|
6,088 |
|
|
|
|
|
|
||||||||
Accretion of debt investment fees |
|
1,474 |
|
|
1,925 |
|
|
4,470 |
|
|
5,018 |
|
|
|
|
|
|
||||||||
New debt investment fees |
|
(1,522 |
) |
|
(1,595 |
) |
|
(2,089 |
) |
|
(2,397 |
) |
|
|
|
|
|
||||||||
Warrants and equity received in settlement of fee income |
|
— |
|
|
80 |
|
|
359 |
|
|
169 |
|
|
|
|
|
|
||||||||
Proceeds from sale of investments |
|
(69 |
) |
|
(2,557 |
) |
|
(157 |
) |
|
(11,063 |
) |
|
|
|
|
|
||||||||
Net realized loss on investments |
|
(33,894 |
) |
|
(11,816 |
) |
|
(31,422 |
) |
|
(28,513 |
) |
|
|
|
|
|
||||||||
Net unrealized appreciation (depreciation) on investments |
|
29,335 |
|
|
(17,518 |
) |
|
864 |
|
|
(24,448 |
) |
|
|
|
|
|
||||||||
Other |
|
— |
|
|
— |
|
|
13 |
|
|
(93 |
) |
|
|
|
|
|
||||||||
Ending portfolio |
$ |
684,000 |
|
$ |
729,053 |
|
$ |
684,000 |
|
$ |
729,053 |
|
Portfolio Asset Quality
The following table shows the classification of Horizon’s loan portfolio at fair value by internal credit rating as of September 30, 2024, June 30, 2024 and December 31, 2023:
($ in thousands) |
September 30, 2024 |
|
June 30, 2024 |
|
December 31, 2023 |
|||||||||
|
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
|
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
|
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
|||
Credit Rating |
|
|
|
|
|
|
|
|
|
|
|
|||
4 |
10 |
$ |
129,508 |
|
|
13 |
$ |
167,758 |
|
|
11 |
$ |
150,367 |
|
3 |
34 |
|
449,085 |
|
|
32 |
|
366,945 |
|
|
39 |
|
452,911 |
|
2 |
6 |
|
33,465 |
|
|
4 |
|
26,336 |
|
|
2 |
|
39,343 |
|
1 |
3 |
|
21,226 |
|
|
5 |
|
48,029 |
|
|
4 |
|
27,551 |
|
Total |
53 |
$ |
633,284 |
|
|
54 |
$ |
609,068 |
|
|
56 |
$ |
670,172 |
|
As of September 30, 2024, June 30, 2024 and December 31, 2023, Horizon’s loan portfolio had a weighted average credit rating of 3.1, with 4 being the highest credit quality rating and 3 being the rating for a standard level of risk. A rating of 2 represents an increased level of risk and, while no loss is currently anticipated for a 2-rated loan, there is potential for future loss of principal. A rating of 1 represents deteriorating credit quality and high degree of risk of loss of principal.
As of September 30, 2024, there were three debt investments with an internal credit rating of 1, with an aggregate cost of
Liquidity and Capital Resources
As of September 30, 2024, the Company had
As of September 30, 2024, there was no outstanding principal balance under the
As of September 30, 2024, there was
Additionally, as of September 30, 2024, there was
Horizon Funding Trust 2022-1, a wholly-owned subsidiary of Horizon, previously issued
During the three months ended September 30, 2024, the Company sold 1,709,096 shares of common stock under its ATM offering program with Goldman Sachs & Co. LLC and B. Riley FBR, Inc. The Company received total accumulated net proceeds of approximately
As of September 30, 2024, the Company’s percentage of debt net of cash to equity was
Liquidity Events
During the quarter ended September 30, 2024, Horizon experienced liquidity events from four portfolio companies. Liquidity events for Horizon may consist of the sale of warrants or equity in portfolio companies, loan prepayments, sale of owned assets or receipt of success fees.
In July, MyForest Foods Co. (“MyForest Foods”) prepaid its outstanding principal balance of
In July, Lemongrass Holdings, Inc. (“Lemongrass”) prepaid its outstanding principal balance of
In July, Slingshot Aerospace, Inc. (“Slingshot Aerospace”) prepaid its outstanding principal balance of
In July, with the proceeds of a new loan from the Horizon Platform, Spineology, Inc. paid its outstanding principal balance of
Net Asset Value
At September 30, 2024, the Company’s net assets were
For the quarter ended September 30, 2024, net increase in net assets resulting from operations was
Stock Repurchase Program
On April 26, 2024, the Company’s board of directors extended the Company’s previously authorized stock repurchase program until the earlier of June 30, 2025 or the repurchase of
Recent Developments
On October 7, 2024, the Company funded a
On October 15, 2024, the Company funded a
On October 17, 2024, the Company entered into a note purchase agreement in connection with the issuance sale of
The Convertible Notes mature on October 16, 2031, unless earlier converted or repurchased in accordance with their terms. The Convertible Notes bear interest at a rate of
On October 18, 2024, the Company funded a
On October 22, 2024, Monroe Capital LLC (“Monroe Capital”), an affiliate of the Company and Horizon Technology Finance Management LLC, the investment advisor to the Company (“HTFM”), announced that Monroe Capital has entered into a definitive agreement with Wendel Group (Euronext: MF:FP) (“Wendel”) relating to Wendel’s strategic investment in Monroe Capital. The transaction is expected to close in the first quarter of 2025, subject to the satisfaction of customary closing conditions, including the receipt of regulatory clearances and approvals and client consents. In connection with the transaction, the Company expects to seek approval of a new investment management agreement between the Company and HTFM, from the Company’s Board of Directors and its shareholders, the terms of which are expected to remain substantively similar to the current investment management agreement.
On October 23, 2024, CAMP NYC, Inc. (“CAMP”) prepaid its outstanding principal balance of
Monthly Distributions Declared in Fourth Quarter 2024
On October 25, 2024, the Company’s board of directors declared monthly distributions of
Monthly Distributions
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
December 16, 2024 |
December 16, 2024 |
January 15, 2025 |
|
January 16, 2025 |
January 16, 2025 |
February 14, 2025 |
|
February 18, 2025 |
February 18, 2025 |
March 14, 2025 |
|
|
|
Total: |
|
After paying distributions of
When declaring distributions, Horizon’s board of directors reviews estimates of taxable income available for distribution, which may differ from consolidated net income under generally accepted accounting principles due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of spillover income carried over from a given year for distribution in the following year. The final determination of taxable income for each tax year, as well as the tax attributes for distributions in such tax year, will be made after the close of the tax year.
Conference Call
The Company will host a conference call on Wednesday, October 30, 2024, at 9:00 a.m. ET to discuss its latest corporate developments and financial results. To participate in the call, please dial (877) 407-9716 (domestic) or (201) 493-6779 (international). The access code for all callers is 13748976. The Company recommends joining the call at least 5 minutes in advance. In addition, a live webcast will be available on the Company’s website at www.horizontechfinance.com.
A webcast replay will be available on the Company’s website for 30 days following the call.
About Horizon Technology Finance
Horizon Technology Finance Corporation (NASDAQ: HRZN), externally managed by Horizon Technology Finance Management LLC, an affiliate of Monroe Capital, is a leading specialty finance company that provides capital in the form of secured loans to venture capital backed companies in the technology, life science, healthcare information and services, and sustainability industries. The investment objective of Horizon is to maximize its investment portfolio’s return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments. Horizon is headquartered in
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition 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 Horizon’s filings with the Securities and Exchange Commission. Horizon undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Horizon Technology Finance Corporation and Subsidiaries Consolidated Statements of Assets and Liabilities (Dollars in thousands, except share and per share data) |
||||||
|
September 30, |
|
December 31, |
|
||
|
2024 |
|
2023 |
|
||
|
(unaudited) |
|
|
|
||
Assets |
|
|
|
|
||
Non-affiliate investments at fair value (cost of |
$ |
655,962 |
|
$ |
693,730 |
|
Non-controlled affiliate investments at fair value (cost of |
|
8,307 |
|
|
1,132 |
|
Controlled affiliate investments at fair value (cost of |
|
19,731 |
|
|
14,223 |
|
Total investments at fair value (cost of |
|
684,000 |
|
|
709,085 |
|
Cash |
|
52,302 |
|
|
46,630 |
|
Investments in money market funds |
|
31,080 |
|
|
26,450 |
|
Restricted investments in money market funds |
|
3,266 |
|
|
2,642 |
|
Interest receivable |
|
15,789 |
|
|
13,926 |
|
Other assets |
|
6,637 |
|
3,623 |
|
|
Total assets |
$ |
793,074 |
$ |
802,356 |
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
||
Borrowings |
$ |
433,969 |
|
$ |
462,235 |
|
Distributions payable |
|
12,475 |
|
|
11,011 |
|
Base management fee payable |
|
1,025 |
|
|
1,052 |
|
Other accrued expenses |
|
3,072 |
|
|
4,077 |
|
Total liabilities |
|
450,541 |
|
|
478,375 |
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
||
|
|
|
|
|
||
Net assets |
|
|
|
|
||
Preferred stock, par value shares issued and outstanding as of September 30, 2024 and December 31, 2023 |
|
— |
|
|
— |
|
Common stock, par value 37,970,529 and 33,534,854 shares issued and 37,803,064 and 33,367,389 shares outstanding as of September 30, 2024 and December 31, 2023, respectively |
|
42 |
|
|
36 |
|
Paid-in capital in excess of par |
|
500,345 |
|
|
450,949 |
|
Distributable loss |
|
(157,854 |
) |
|
(127,004 |
) |
Total net assets |
|
342,533 |
|
|
323,981 |
|
Total liabilities and net assets |
$ |
793,074 |
|
$ |
802,356 |
|
Net asset value per common share |
$ |
9.06 |
|
$ |
9.71 |
|
Horizon Technology Finance Corporation and Subsidiaries Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share data) |
||||||||||||
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
||||||||
|
September 30, |
|
September 30, |
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
||||
Investment income |
|
|
|
|
|
|
|
|
||||
From non-affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income |
$ |
22,779 |
|
$ |
23,825 |
|
$ |
71,549 |
|
$ |
75,695 |
|
Fee income |
|
1,382 |
|
|
124 |
|
|
2,661 |
|
|
2,255 |
|
Payment-in-kind income |
|
161 |
|
|
3,777 |
|
|
1,554 |
|
|
5,930 |
|
From non-controlled affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income |
|
— |
|
|
1,246 |
|
|
— |
|
|
1,246 |
|
From controlled affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income |
|
25 |
|
|
8 |
|
|
46 |
|
|
8 |
|
Payment-in-kind income |
|
216 |
|
|
158 |
|
|
560 |
|
|
158 |
|
Total investment income |
|
24,563 |
|
|
29,138 |
|
|
76,370 |
|
|
85,292 |
|
Expenses |
|
|
|
|
|
|
|
|
||||
Interest expense |
|
7,945 |
|
|
7,107 |
|
|
24,046 |
|
|
21,407 |
|
Base management fee |
|
2,989 |
|
|
3,213 |
|
|
9,178 |
|
|
9,621 |
|
Performance based incentive fee |
|
— |
|
|
— |
|
|
295 |
|
|
3,094 |
|
Administrative fee |
|
400 |
|
|
441 |
|
|
1,259 |
|
|
1,249 |
|
Professional fees |
|
587 |
|
|
452 |
|
|
1,707 |
|
|
1,558 |
|
General and administrative |
|
432 |
|
|
392 |
|
|
1,419 |
|
|
1,384 |
|
Total expenses |
|
12,353 |
|
|
11,605 |
|
|
37,904 |
|
|
38,313 |
|
Net investment income before excise tax |
|
12,210 |
|
|
17,533 |
|
|
38,466 |
|
|
46,979 |
|
Provision for excise tax |
|
373 |
|
|
179 |
|
|
1,109 |
|
|
542 |
|
Net investment income |
|
11,837 |
|
|
17,354 |
|
|
37,357 |
|
|
46,437 |
|
Net realized and unrealized loss |
|
|
|
|
|
|
|
|
||||
Net realized loss on non-affiliate investments |
|
(33,894 |
) |
|
(11,816 |
) |
|
(31,459 |
) |
|
(28,513 |
) |
Net realized gain on non-controlled affiliate investments |
|
— |
|
|
— |
|
|
37 |
|
|
— |
|
Net realized loss on investments |
|
(33,894 |
) |
|
(11,816 |
) |
|
(31,422 |
) |
|
(28,513 |
) |
Net unrealized appreciation (depreciation) on non-affiliate investments |
|
35,407 |
|
|
180 |
|
|
(2,094 |
) |
|
(7,656 |
) |
Net unrealized (depreciation) appreciation on non-controlled affiliate investments |
|
(6,237 |
) |
|
(19,055 |
) |
|
8,374 |
|
|
(18,149 |
) |
Net unrealized appreciation (depreciation) on controlled affiliate investments |
|
165 |
|
|
1,357 |
|
|
(5,416 |
) |
|
1,357 |
|
Net unrealized appreciation (depreciation) on investments |
|
29,335 |
|
|
(17,518 |
) |
|
864 |
|
|
(24,448 |
) |
Net realized and unrealized loss |
|
(4,559 |
) |
|
(29,334 |
) |
|
(30,558 |
) |
|
(52,961 |
) |
Net increase (decrease) in net assets resulting from operations |
$ |
7,278 |
|
$ |
(11,980 |
) |
$ |
6,799 |
|
$ |
(6,524 |
) |
Net investment income per common share |
$ |
0.32 |
|
$ |
0.53 |
|
$ |
1.06 |
|
$ |
1.54 |
|
Net increase (decrease) in net assets resulting from operations per common share |
$ |
0.20 |
|
$ |
(0.37 |
) |
$ |
0.19 |
|
$ |
(0.22 |
) |
Distributions declared per share |
$ |
0.33 |
|
$ |
0.33 |
|
$ |
1.04 |
|
$ |
0.99 |
|
Weighted average shares outstanding |
|
36,571,000 |
|
|
32,451,900 |
|
|
35,200,189 |
|
|
30,155,287 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029503067/en/
Investor Relations:
ICR
Garrett Edson
ir@horizontechfinance.com
(646) 200-8885
Media Relations:
ICR
Chris Gillick
HorizonPR@icrinc.com
(646) 677-1819
Source: Horizon Technology Finance Corporation
FAQ
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