PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Quarter Ended March 31, 2022
PennantPark Floating Rate Capital Ltd. (PFLT) announced its financial results for the second fiscal quarter ended March 31, 2022. The investment portfolio totaled $1,192.6 million, with a net asset value per share of $12.62. Net investment income reached $11.4 million, or $0.29 per share, an increase from the prior year. Total expenses amounted to $13.3 million. The company reported a net increase in assets of $7.2 million for the quarter. As of March 31, 2022, 87% of the portfolio was in first lien secured debt, highlighting a focus on lower-risk investments.
- Net investment income increased to $11.4 million, or $0.29 per share, up from $9.9 million in 2021.
- Investment portfolio grew to $1,192.6 million with an overall net unrealized appreciation of $25.4 million.
- Weighted average yield on debt investments was 7.5%, reflecting strong portfolio performance.
- Net realized losses totaled $15.5 million for the quarter, indicating challenges in market conditions.
- Total expenses rose to $13.3 million, primarily due to higher performance-based fees and debt-related expenses.
MIAMI, May 04, 2022 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) (TASE: PFLT) announced today financial results for the second fiscal quarter ended March 31, 2022.
HIGHLIGHTS
Quarter ended March 31, 2022 | ||||
($ in millions, except per share amounts) | ||||
Assets and Liabilities: | ||||
Investment portfolio (1) | $ | 1,192.6 | ||
PSSL investment portfolio | $ | 705.0 | ||
Net assets | $ | 520.0 | ||
GAAP net asset value per share | $ | 12.62 | ||
Quarterly decrease GAAP net asset value per share | 0.7 | % | ||
Adjusted net asset value per share (2) | $ | 12.41 | ||
Credit Facility | $ | 249.9 | ||
2023 Notes | $ | 88.3 | ||
2026 Notes | $ | 181.9 | ||
2031 Asset-Backed Debt | $ | 225.8 | ||
Regulatory Debt to Equity | 1.50x | |||
Regulatory Net Debt to Equity (3) | 1.40x | |||
GAAP Net Debt to Equity (4) | 1.34x | |||
Yield on debt investments at quarter-end | 7.5 | % |
Operating Results: | ||||
Net investment income | $ | 11.4 | ||
Net investment income per share | $ | 0.29 | ||
Distributions declared per share | $ | 0.285 | ||
PFLT Portfolio Activity: | ||||
Purchases of investments | $ | 113.2 | ||
Sales and repayments of investments | $ | 103.9 | ||
Number of new portfolio companies invested | 7 | |||
Number of existing portfolio companies invested | 29 | |||
Number of ending portfolio companies | 119 | |||
PSSL Portfolio Activity: | ||||
Purchases of investments | $ | 67.5 | ||
Sales and repayments of investments | $ | 5.3 |
(1) Includes investments in PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture, totaling
(2) 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 the
(3) 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 net of
(4) 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 including the impact of the
CONFERENCE CALL AT 9:00 A.M. ET ON MAY 5, 2022
PennantPark Floating Rate Capital Ltd. (“we,” “our,” “us” or the “Company”) will also host a conference call at 9:00 a.m. (Eastern Time) on Thursday May 5, 2022 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (866) 548-4713 approximately 5-10 minutes prior to the call. International callers should dial (323) 794-2093. All callers should reference conference ID #5639720 or PennantPark Floating Rate Capital Ltd. An archived replay of the call will be available through May 19, 2022, by calling toll-free (888) 203-1112. International callers please dial (719) 457-0820. For all phone replays, please reference conference ID #5639720.
PORTFOLIO AND INVESTMENT ACTIVITY
“In this market environment we are pleased to be focused on lower risk, first lien senior secured floating rate loans to U.S. companies, which are positioned to preserve capital and protect against rising inflation and interest rates. We believe that we are an important strategic capital partner who can fuel growth for companies in the core middle market,” said Art Penn, Chairman and CEO. “Our substantially upsized PSSL joint venture is positioned to generate growing Net Investment Income for PFLT.”
As of March 31, 2022, our portfolio totaled
As of September 30, 2021, our portfolio totaled
For the three months ended March 31, 2022, we invested
For the three months ended March 31, 2021, we invested
PennantPark Senior Secured Loan Fund I LLC
As of March 31, 2022, PSSL’s portfolio totaled
For the three months ended March 31, 2022, PSSL invested
For the three months ended March 31, 2021, PSSL invested
RESULTS OF OPERATIONS
Set forth below are the results of operations for the three and six months ended March 31, 2022 and 2021.
Investment Income
Investment income for the three and six months ended March 31, 2022 was
Expenses
Expenses for the three and six months ended March 31, 2022 totaled
Net Investment Income
Net investment income totaled
Net Realized Gains or Losses
Sales and repayments of investments for the three and six months ended March 31, 2022 totaled
Unrealized Appreciation or Depreciation on Investments, the Credit Facility and the 2023 Notes
For the three and six months ended March 31, 2022, we reported net change in unrealized appreciation on investments of
For the three and six months ended March 31, 2022, the Credit Facility and the 2023 Notes had a net change in unrealized (appreciation) depreciation of
Net Change in Net Assets Resulting from Operations
Net increase in net assets resulting from operations totaled
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources are derived primarily from proceeds of securities offerings, debt capital and cash flows from operations, including investment sales and repayments, and income earned. Our primary use of funds from operations includes investments in portfolio companies and payments of 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. For more information on how the COVID-19 pandemic may impact our ability to comply with the covenants of the Credit Facility, see our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, including “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – COVID-19 Developments”.
The annualized weighted average cost of debt for the six months ended March 31, 2022 and 2021, inclusive of the fee on the undrawn commitment on the Credit Facility, amendment costs and debt issuance costs, was
As of March 31, 2022 and September 30, 2021, our wholly owned subsidiary, PennantPark Floating Rate Funding I, LLC, borrowed
As of March 31, 2022 and September 30, 2021, we had cash equivalents of
Our operating activities used cash of
Our operating activities provided cash of
RECENT DEVELOPMENTS
On May 2, 2022, the PSSL Credit Facility was amended to, among other things, to allow PSSL Subsidiary II to borrow up to
DISTRIBUTIONS
During the three and six months ended March 31, 2022, we declared distributions of
AVAILABLE INFORMATION
The Company makes available on its website its Quarterly Report on Form 10-Q filed with the SEC, and stockholders may find such report on its website at www.pennantpark.com.
PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share data)
March 31, 2022 | September 30, 2021 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Investments at fair value | ||||||||
Non-controlled, non-affiliated investments (cost— | $ | 933,041 | $ | 856,806 | ||||
Non-controlled, affiliated investments (cost— $ — and | — | 7,433 | ||||||
Controlled, affiliated investments (cost— | 259,571 | 217,380 | ||||||
Total investments (cost— | 1,192,613 | 1,081,619 | ||||||
Cash and cash equivalents (cost— | 50,064 | 49,826 | ||||||
Interest receivable | 5,316 | 5,446 | ||||||
Receivable for investments sold | 38,542 | 33,966 | ||||||
Prepaid expenses and other assets | 1,356 | — | ||||||
Total assets | 1,287,891 | 1,170,856 | ||||||
Liabilities | ||||||||
Distributions payable | 3,814 | 3,690 | ||||||
Payable for investments purchased | — | 13,546 | ||||||
Credit Facility payable, at fair value (cost— | 249,910 | 218,852 | ||||||
2023 Notes payable, at fair value (par— | 88,275 | 111,114 | ||||||
2026 Notes payable, net (par— | 181,888 | 97,171 | ||||||
2031 Asset-Backed Debt, net (par— | 225,813 | 225,497 | ||||||
Interest payable on debt | 6,975 | 5,455 | ||||||
Base management fee payable | 2,945 | 2,707 | ||||||
Performance-based incentive fee payable | 2,704 | 624 | ||||||
Deferred tax liability | 5,340 | — | ||||||
Accrued other expenses | 241 | 1,591 | ||||||
Total liabilities | 767,904 | 680,245 | ||||||
Commitments and contingencies | ||||||||
Net assets | ||||||||
Common stock, 41,209,566 and 38,880,728 shares issued and outstanding, respectively Par value | 41 | 39 | ||||||
Paid-in capital in excess of par value | 568,869 | 538,815 | ||||||
Accumulated deficit | (48,924 | ) | (48,242 | ) | ||||
Total net assets | $ | 519,986 | $ | 490,611 | ||||
Total liabilities and net assets | $ | 1,287,891 | $ | 1,170,856 | ||||
Net asset value per share | $ | 12.62 | $ | 12.62 |
PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Investment income: | ||||||||||||||||
From non-controlled, non-affiliated investments: | ||||||||||||||||
Interest | $ | 16,195 | $ | 13,725 | $ | 33,052 | $ | 29,026 | ||||||||
Dividend | 577 | — | 1,154 | — | ||||||||||||
Other income | 686 | 491 | 3,510 | 1,373 | ||||||||||||
From non-controlled, affiliated investments: | ||||||||||||||||
Interest | — | 183 | 112 | 280 | ||||||||||||
Other income | — | 102 | — | 123 | ||||||||||||
From controlled, affiliated investments: | ||||||||||||||||
Interest | 3,240 | 2,659 | 6,405 | 5,322 | ||||||||||||
Dividend | 3,938 | 2,275 | 6,738 | 3,850 | ||||||||||||
Other Income | — | — | — | 196 | ||||||||||||
Total investment income | 24,635 | 19,435 | 50,971 | 40,169 | ||||||||||||
Expenses: | ||||||||||||||||
Base management fee | 2,945 | 2,634 | 5,841 | 5,350 | ||||||||||||
Performance-based incentive fee | 2,704 | 1,302 | 5,885 | 3,064 | ||||||||||||
Interest and expenses on debt | 6,705 | 4,781 | 13,344 | 10,122 | ||||||||||||
Administrative services expenses | 144 | 300 | 287 | 600 | ||||||||||||
Other general and administrative expenses | 655 | 400 | 1,309 | 800 | ||||||||||||
Expenses before provision for taxes | 13,153 | 9,417 | 26,667 | 19,936 | ||||||||||||
Provision for taxes on net investment income | 100 | 100 | 200 | 200 | ||||||||||||
Total expenses | 13,253 | 9,517 | 26,867 | 20,136 | ||||||||||||
Net investment income | 11,382 | 9,918 | 24,104 | 20,032 | ||||||||||||
Realized and unrealized (loss) gain on investments and debt: | ||||||||||||||||
Net realized gain (loss) on: | ||||||||||||||||
Non-controlled, non-affiliated investments | 6,920 | 474 | 9,993 | (1,234 | ) | |||||||||||
Non-controlled and controlled, affiliated investments | (22,380 | ) | — | (22,315 | ) | (1,052 | ) | |||||||||
Net realized gain (loss) on investments | (15,460 | ) | 474 | (12,322 | ) | (2,286 | ) | |||||||||
Net change in unrealized (depreciation) appreciation on: | ||||||||||||||||
Non-controlled, non-affiliated investments | (5,425 | ) | 12,151 | (1,038 | ) | 34,688 | ||||||||||
Controlled and non-controlled, affiliated investments | 22,913 | (334 | ) | 15,029 | (81 | ) | ||||||||||
Provision for taxes on unrealized appreciation on investments | (3,800 | ) | — | (5,340 | ) | — | ||||||||||
Debt depreciation (appreciation) | (2,363 | ) | (10,535 | ) | 1,247 | (14,549 | ) | |||||||||
Net change in unrealized (depreciation) appreciation on investments and debt | 11,324 | 1,282 | 9,897 | 20,058 | ||||||||||||
Net realized and unrealized (loss) gain from investments and debt | (4,136 | ) | 1,755 | (2,424 | ) | 17,772 | ||||||||||
Net increase in net assets resulting from operations | $ | 7,246 | $ | 11,673 | $ | 21,679 | $ | 37,804 | ||||||||
Net increase in net assets resulting from operations per common share | $ | 0.18 | $ | 0.30 | $ | 0.55 | $ | 0.98 | ||||||||
Net investment income per common share | $ | 0.29 | $ | 0.26 | $ | 0.61 | $ | 0.52 |
ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.
PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.
ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC
PennantPark Investment Advisers, LLC is a leading middle-market credit platform, managing
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, or 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 we file 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 Securities and Exchange Commission as well as changes in the economy and risks associated with possible disruption in the Company’s operations or the economy generally due to terrorism, natural disasters or pandemics such as COVID-19. PennantPark Floating Rate Capital Ltd. 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.
CONTACT: | Richard Cheung |
PennantPark Floating Rate Capital Ltd. | |
(212) 905-1000 | |
www.pennantpark.com |
FAQ
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