PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Quarter Ended June 30, 2021
PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) has reported its financial results for Q3 2021, ending June 30. The company holds an investment portfolio valued at $1,035.8 million, with a net asset value per share of $12.81, reflecting a 0.8% increase. Net investment income stands at $10.3 million or $0.27 per share, while total distributions declared per share are $0.285.
The company has experienced a decline in investment income from $22.8 million in Q3 2020 to $20.9 million for the same period this year.
- Net asset value per share increased to $12.81, up 0.8%.
- Declared distributions of $0.285 per share for the quarter.
- Net investment income improved slightly compared to Q3 2020.
- Investment income decreased from $22.8 million in Q3 2020 to $20.9 million in Q3 2021.
- Net realized losses increased to $13 million for the quarter.
- Two portfolio companies on non-accrual, representing 2.8% of the portfolio.
NEW YORK, Aug. 04, 2021 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) (TASE: PFLT) announced today financial results for the third fiscal quarter ended June 30, 2021.
HIGHLIGHTS
Quarter ended June 30, 2021 ($ in millions, except per share amounts) | |||
Assets and Liabilities: | |||
Investment portfolio (1) | $ | 1,035.8 | |
PSSL investment portfolio | $ | 529.6 | |
Net assets | $ | 496.6 | |
GAAP net asset value per share | $ | 12.81 | |
Quarterly increase GAAP net asset value per share | |||
Adjusted net asset value per share (2) | $ | 12.62 | |
Credit Facility | $ | 133.1 | |
2023 Notes | $ | 110.6 | |
2026 Notes | $ | 97.0 | |
2031 Asset-Backed Debt | $ | 225.3 | |
Regulatory Debt to Equity | 1.18x | ||
Regulatory Net Debt to Equity (3) | 1.08x | ||
GAAP Net Debt to Equity (4) | 1.04x | ||
Yield on debt investments at quarter-end |
Operating Results: | |||
Net investment income | $ | 10.3 | |
Net investment income per share | $ | 0.27 | |
Distributions declared per share | $ | 0.285 | |
PFLT Portfolio Activity: | |||
Purchases of investments | $ | 248.3 | |
Sales and repayments of investments | $ | 283.3 | |
Number of new portfolio companies invested | 10 | ||
Number of existing portfolio companies invested | 16 | ||
Number of ending portfolio companies | 100 | ||
PSSL Portfolio Activity: | |||
Purchases of investments | $ | 133.7 | |
Sales and repayments of investments | $ | 88.8 |
(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 AUGUST 5, 2021
PennantPark Floating Rate Capital Ltd. (“we,” “our,” “us” or the “Company”) will host a conference call at 9:00 a.m. (Eastern Time) on Thursday, August 5, 2021 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (800) 263-0877 approximately 5-10 minutes prior to the call. International callers should dial (646) 828-8143. All callers should reference conference ID #2369860 or PennantPark Floating Rate Capital Ltd. An archived replay of the call will be available through August 20, 2021 by calling toll-free (888) 203-1112. International callers please dial (719) 457-0820. For all phone replays, please reference conference ID #2369860.
PORTFOLIO AND INVESTMENT ACTIVITY
“We are pleased with the strong performance of our portfolio this past quarter,” said Arthur Penn, Chairman and CEO. “Our PSSL joint venture saw significant growth. We believe that the growth of PSSL in conjunction with the Company’s growing, more optimized balance sheet and the rotation of equity positions into debt instruments, positions the Company well for increased income over time.”
As of June 30, 2021, our portfolio totaled
As of September 30, 2020, our portfolio totaled
For the three months ended June 30, 2021, we invested
For the three months ended June 30, 2020, we invested
PennantPark Senior Secured Loan Fund I LLC
As of June 30, 2021, PSSL’s portfolio totaled
For the three months ended June 30, 2021, PSSL invested
For the three months ended June 30, 2020, PSSL did not make any new or follow-on investments. Sales and repayments of investments for the three months ended June 30, 2020 totaled
RESULTS OF OPERATIONS
Set forth below are the results of operations for the three and nine months ended June 30, 2021 and 2020.
Investment Income
Investment income for the three and nine months ended June 30, 2021 was
Expenses
Expenses for the three and nine months ended June 30, 2021 totaled
Net Investment Income
Net investment income totaled
Net Realized Gains or Losses
Sales and repayments of investments for the three and nine months ended June 30, 2021 totaled
Unrealized Appreciation or Depreciation on Investments, the Credit Facility and the 2023 Notes
For the three and nine months ended June 30, 2021, we reported net change in unrealized appreciation on investments of
For the three and nine months ended June 30, 2021, the Credit Facility and the 2023 Notes had a net change in unrealized depreciation (appreciation) 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 June 30, 2021, 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 nine months ended June 30, 2021 and 2020, inclusive of the fee on the undrawn commitment on the Credit Facility, amendment costs and debt issuance costs, was
As of June 30, 2021 and September 30, 2020, our wholly owned subsidiary, PennantPark Floating Rate Funding I, LLC, borrowed
As of June 30, 2021 and September 30, 2020, we had cash equivalents of
Our operating activities provided cash of
Our operating activities used cash of
RECENT DEVELOPMENTS
Subsequent to quarter end, PFLT had new originations of
Subsequent to quarter end we and a subsidiary of Kemper Corporation (NYSE: KMPR), Trinity Universal Insurance Company, have agreed to increase our capital commitments to PSSL from
DISTRIBUTIONS
During the three and nine months ended June 30, 2021 and 2020, 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
June 30, 2021 | September 30, 2020 | ||||||
(unaudited) | |||||||
Assets | |||||||
Investments at fair value | |||||||
Non-controlled, non-affiliated investments (cost— | $ | 818,638,740 | $ | 910,552,309 | |||
Non-controlled, affiliated investments (cost— Zero and | — | 11,086,834 | |||||
Controlled, affiliated investments (cost— | 217,184,933 | 165,289,324 | |||||
Total investments (cost— | 1,035,823,673 | 1,086,928,467 | |||||
Cash and cash equivalents (cost— | 48,702,743 | 57,511,928 | |||||
Interest receivable | 6,319,900 | 3,673,502 | |||||
Receivable for investments sold | 11,953,906 | — | |||||
Prepaid expenses and other assets | — | 173,318 | |||||
Total assets | 1,102,800,222 | 1,148,287,215 | |||||
Liabilities | |||||||
Distributions payable | 3,683,347 | 3,683,347 | |||||
Payable for investments purchased | 27,277,154 | 3,800,000 | |||||
Credit Facility payable, at fair value (cost— | 133,066,500 | 299,047,275 | |||||
2023 Notes payable, at fair value (par— | 110,607,514 | 129,295,008 | |||||
2026 Notes payable, net (par— | 97,013,575 | — | |||||
2031 Asset-Backed Debt, net (par— | 225,339,466 | 224,866,334 | |||||
Interest payable on debt | 3,098,401 | 3,601,479 | |||||
Base management fee payable | 2,621,573 | 2,776,477 | |||||
Performance-based incentive fee payable | 1,652,278 | 2,071,622 | |||||
Accrued other expenses | 1,808,734 | 1,875,281 | |||||
Total liabilities | 606,168,542 | 671,016,823 | |||||
Commitments and contingencies | |||||||
Net assets | |||||||
Common stock, 38,772,074 shares issued and outstanding Par value shares authorized | 38,772 | 38,772 | |||||
Paid-in capital in excess of par value | 538,151,527 | 538,151,528 | |||||
Accumulated distributable net loss | (41,558,619 | ) | (60,919,908 | ||||
Total net assets | $ | 496,631,680 | $ | 477,270,392 | |||
Total liabilities and net assets | $ | 1,102,800,222 | $ | 1,148,287,215 | |||
Net asset value per share | $ | 12.81 | $ | 12.31 | |||
PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Investment income: | |||||||||||||||
From non-controlled, non-affiliated investments: | |||||||||||||||
Interest | $ | 14,494,948 | $ | 17,543,157 | $ | 43,520,917 | $ | 56,760,434 | |||||||
Other income | 1,161,193 | 820,997 | 2,533,741 | 2,734,600 | |||||||||||
From non-controlled, affiliated investments: | |||||||||||||||
Interest | — | 195,904 | 279,900 | 655,029 | |||||||||||
Other income | — | 36,170 | 122,570 | 36,170 | |||||||||||
From controlled, affiliated investments: | |||||||||||||||
Interest | 2,931,015 | 2,944,290 | 8,252,910 | 9,169,399 | |||||||||||
Dividend | 2,318,750 | 1,225,000 | 6,168,750 | 4,375,000 | |||||||||||
Other income | — | — | 195,630 | — | |||||||||||
Total investment income | 20,905,906 | 22,765,518 | 61,074,418 | 73,730,632 | |||||||||||
Expenses: | |||||||||||||||
Base management fee | 2,621,574 | 2,872,725 | 7,971,461 | 8,651,825 | |||||||||||
Performance-based incentive fee | 1,652,278 | 1,975,831 | 4,716,177 | 7,228,690 | |||||||||||
Interest and expenses on debt | 5,902,727 | 6,653,045 | 16,025,180 | 21,586,859 | |||||||||||
Administrative services expenses | 150,000 | 350,000 | 750,000 | 1,050,000 | |||||||||||
Other general and administrative expenses | 200,000 | 616,077 | 1,000,000 | 1,848,230 | |||||||||||
Expenses before provision for taxes: | 10,526,579 | 12,467,678 | 30,462,818 | 40,365,604 | |||||||||||
Provision for taxes | 100,000 | 100,000 | 300,000 | 300,000 | |||||||||||
Total expenses | 10,626,579 | 12,567,678 | 30,762,818 | 40,665,604 | |||||||||||
Net investment income | 10,279,327 | 10,197,840 | 30,311,600 | 33,065,028 | |||||||||||
Realized and unrealized gain (loss) on investments and debt: | |||||||||||||||
Net realized gain (loss) on investments: | |||||||||||||||
Non-controlled, non-affiliated investments | 7,613,904 | (1,694,710 | ) | 6,379,865 | (2,281,683 | ||||||||||
Non-controlled and controlled, affiliated investments | (20,587,656 | ) | (5,683,145 | ) | (21,639,704 | ) | (5,683,145 | ||||||||
Net realized gain (loss) on investments | (12,973,752 | ) | (7,377,855 | ) | (15,259,839 | ) | (7,964,828 | ||||||||
Net change in unrealized appreciation (depreciation) on: | |||||||||||||||
Non-controlled, non-affiliated investments | (6,281,187 | ) | 13,962,606 | 28,406,639 | (23,662,521 | ||||||||||
Controlled and non-controlled, affiliated investments | 20,451,408 | 7,931,471 | 20,370,222 | (22,751,006 | |||||||||||
Debt (appreciation) depreciation | 3,231,683 | (12,158,917 | ) | (11,317,211 | ) | 22,740,317 | |||||||||
Net change in unrealized appreciation (depreciation) on investments and debt | 17,401,904 | 9,735,160 | 37,459,650 | (23,673,210 | |||||||||||
Net realized and unrealized gain (loss) from investments and debt | 4,428,152 | 2,357,305 | 22,199,811 | (31,638,038 | |||||||||||
Net increase in net assets resulting from operations | $ | 14,707,479 | $ | 12,555,145 | $ | 52,511,411 | $ | 1,426,990 | |||||||
Net increase in net assets resulting from operations per common share | $ | 0.38 | $ | 0.32 | $ | 1.35 | $ | 0.04 | |||||||
Net investment income per common share | $ | 0.27 | $ | 0.26 | $ | 0.78 | $ | 0.85 | |||||||
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
What are the Q3 2021 results for PennantPark Floating Rate Capital Ltd. (PFLT)?
How much investment income did PFLT generate in Q3 2021?
What is the current distribution declared per share by PFLT?
Did PFLT experience any unrealized losses or gains in Q3 2021?