PhenixFIN Corporation Announces Fiscal First Quarter 2024 Financial Results
- 23% growth in NAV per share
- Total investment income of $5.7 million
- Weighted average yield of 13.0%
- Net realized gain of $0.2 million and net unrealized gain of $2.6 million
- 4 portfolio company investments on non-accrual status with a fair market value of $8.9 million, indicating potential risks
Insights
The reported 23% growth in NAV per share for PhenixFIN Corporation is a strong indicator of the company's asset value growth, which is a critical metric for investors assessing the health and potential of a business development company (BDC). The increase in NAV suggests that the company's investment strategies are yielding positive outcomes, with the portfolio generating both investment income and capital appreciation. This is particularly noteworthy given the context of a BDC, where the NAV reflects the value of the company's investments minus its liabilities and is a key determinant of the company's share price.
The company's repurchase of shares also signals confidence in its intrinsic value, as buybacks typically indicate that management believes the shares are undervalued. However, it is important to analyze the repurchase in the context of the company's overall capital allocation strategy and liquidity position. With $12.2 million in cash and cash equivalents, the company appears to have a solid liquidity position, although the outstanding debt under the credit facility and unsecured notes due 2028 should be monitored for their impact on financial flexibility.
The reported weighted average yield of 13.0% on debt and other income-producing investments by PhenixFIN Corporation is a substantial figure, particularly when compared to average yields in the broader market. This high yield could be indicative of the company's focus on higher-risk, higher-reward investments within its portfolio. For stakeholders, this might suggest a more aggressive investment strategy that could potentially offer higher returns, but also carries increased risk. The presence of four portfolio company investments on non-accrual status is a point of concern, as it indicates that these investments are not currently generating interest income, which could impact future earnings if not resolved.
Understanding the company's strategy in managing these non-accrual assets and the risk profile of its overall portfolio would be crucial for investors. It would also be insightful to compare the company's performance and strategy with industry peers to gauge its competitiveness and risk-adjusted returns.
The financial results of PhenixFIN Corporation, particularly the growth in NAV and the net unrealized gains, must be contextualized within the broader economic environment. A 23% increase in NAV per share could reflect not only the company's individual performance but also broader economic trends such as interest rate movements, market liquidity and investor sentiment towards alternative investments like those held by BDCs. The company's ability to sustain a high yield on investments amidst economic fluctuations will be pivotal in maintaining investor confidence and ensuring long-term growth.
Additionally, the company's capital structure, with a mix of cash, unsecured notes and a credit facility, reflects a strategic approach to financing that balances leverage with liquidity. The interplay between these elements can significantly influence the company's operational flexibility and its ability to capitalize on new investment opportunities or weather economic downturns.
NAV per share grew
NEW YORK, Feb. 08, 2024 (GLOBE NEWSWIRE) -- PhenixFIN Corporation (NASDAQ: PFX, PFXNZ) (the "Company"), a publicly traded business development company, today announced its financial results for the fiscal first quarter of 2024.
Highlights
- First quarter total investment income of
$5.7 million ; net investment income of$1.7 million - Net asset value (NAV) of
$150.7 million , or$73.14 per share as of December 31, 2023 - Weighted average yield was
13.0% on debt and other income producing investments - Repurchased 13,223 shares as of December 31, 2023
David Lorber, Chief Executive Officer of the Company, stated:
“We are pleased with our continued progress in growing our NAV per share as various investments over the past couple of years have generated favorable investment income and/or capital appreciation.”
Selected First Quarter 2024 Financial Results for the Quarter Ended December 31, 2023:
Total investment income was
Total net expenses were
The Company recorded a net realized gain of
Portfolio and Investment Activities for the Quarter Ended December 31, 2023:
The fair value of the Company's investment portfolio totaled
The Company had 4 portfolio company investments on non-accrual status with a fair market value of
Liquidity and Capital Resources
At December 31, 2023, the Company had
ABOUT PHENIXFIN CORPORATION
PhenixFIN Corporation is a non-diversified, internally managed closed-end management investment company incorporated in Delaware that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. We completed our initial public offering and commenced operations on January 20, 2011. The Company has elected, and intends to qualify annually, to be treated, for U.S. federal income tax purposes, as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Effective January 1, 2021, the Company operates under an internalized management structure.
SAFE HARBOR STATEMENT AND OTHER DISCLOSURES
This press release contains “forward-looking” statements. Such forward-looking statements reflect current views with respect to future events and financial performance, and the Company may make related oral forward-looking statements on or following the date hereof. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, including among other things, PhenixFIN’s ability to deliver value to shareholders, increase investment activity, grow the Company, increase net investment income, reduce operating expenses, implement its investment objective, source and capitalize on investment opportunities, grow its net asset value and perform well in the prevailing market environment, the ability of our portfolio companies to perform well and generate income and other factors that are enumerated in the Company’s periodic filings with the Securities and Exchange Commission. PhenixFIN Corporation disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release.
Past performance is not a guarantee of future results. The press release contains unaudited financial results. For ease of review, we have excluded the word "approximately" when rounding the results. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to sell shares of PhenixFIN Corporation’s common stock. There can be no assurance that PhenixFIN Corporation will achieve its investment objective.
For PhenixFIN investor relations, please call 212-859-0390. For media inquiries, please contact info@phenixfc.com.
PHENIXFIN CORPORATION
Consolidated Statements of Assets and Liabilities
| December 31, 2023 (Unaudited) | September 30, 2023 | |||||||
| Assets: | ||||||||
| Investments at fair value | ||||||||
| Non-controlled, non-affiliated investments (amortized cost of | $ | 116,100,267 | $ | 125,531,031 | ||||
| Affiliated investments (amortized cost of | 40,868,870 | 37,289,617 | ||||||
| Controlled investments (amortized cost of | 65,252,515 | 63,640,043 | ||||||
| Total Investments at fair value | 222,221,652 | 226,460,691 | ||||||
| Cash and cash equivalents | 12,173,975 | 5,988,223 | ||||||
| Receivables: | ||||||||
| Interest receivable | 1,400,137 | 971,115 | ||||||
| Dividends receivable | 243,302 | 161,479 | ||||||
| Other receivable | - | 31,425 | ||||||
| Prepaid share repurchase | 132,295 | 199,019 | ||||||
| Due from Affiliate | 417,014 | 409,214 | ||||||
| Other assets | 615,571 | 833,000 | ||||||
| Deferred financing costs | 637,276 | 699,124 | ||||||
| Receivable for investments sold | - | 3,940,175 | ||||||
| Total Assets | $ | 237,841,222 | $ | 239,693,465 | ||||
| Liabilities: | ||||||||
| Credit facility and note payable (net of debt issuance costs of | $ | 84,336,685 | $ | 84,253,106 | ||||
| Accounts payable and accrued expenses | 1,615,180 | 3,066,984 | ||||||
| Interest and fees payable | 721,341 | 690,398 | ||||||
| Other liabilities | 394,364 | 432,698 | ||||||
| Administrator expenses payable (see Note 6) | 72,852 | - | ||||||
| Payable for investments purchased | - | 4,123,059 | ||||||
| Deferred revenue | - | 421,685 | ||||||
| Total Liabilities | 87,140,422 | 92,987,930 | ||||||
| Commitments and Contingencies (see Note 8) | ||||||||
| Net Assets: | ||||||||
| Common Shares, | 2,061 | 2,074 | ||||||
| Capital in excess of par value | 694,273,678 | 694,812,239 | ||||||
| Total distributable earnings (loss) | (543,574,939 | ) | (548,108,778 | ) | ||||
| Total Net Assets | 150,700,800 | 146,705,535 | ||||||
| Total Liabilities and Net Assets | $ | 237,841,222 | $ | 239,693,465 | ||||
| Net Asset Value Per Common Share | $ | 73.14 | $ | 70.75 | ||||
PHENIXFIN CORPORATION
Consolidated Statements of Operations
(Unaudited)
| For the Three Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Interest Income: | ||||||||
| Interest from investments | ||||||||
| Non-controlled, non-affiliated investments: | ||||||||
| Cash | $ | 2,682,143 | $ | 1,916,041 | ||||
| Payment in-kind | 90,674 | 106,187 | ||||||
| Affiliated investments: | ||||||||
| Cash | 455,692 | 198,453 | ||||||
| Payment in-kind | - | 89,743 | ||||||
| Controlled investments: | ||||||||
| Cash | 286,238 | 194,627 | ||||||
| Payment in-kind | 149,967 | - | ||||||
| Total interest income | 3,664,714 | 2,505,051 | ||||||
| Dividend income | 2,013,726 | 2,032,358 | ||||||
| Interest from cash and cash equivalents | 41,108 | 92,226 | ||||||
| Fee income (see Note 9) | 2,108 | 73,599 | ||||||
| Other income | 22 | - | ||||||
| Total Investment Income | 5,721,678 | 4,703,234 | ||||||
| Expenses: | ||||||||
| Interest and financing expenses | 1,542,061 | 1,233,176 | ||||||
| Salaries and benefits | 1,424,992 | 857,533 | ||||||
| Professional fees, net | 357,554 | 347,917 | ||||||
| General and administrative expenses | 325,061 | 219,977 | ||||||
| Directors fees | 187,500 | 194,000 | ||||||
| Insurance expenses | 97,756 | 124,084 | ||||||
| Administrator expenses (see Note 6) | 77,852 | 77,884 | ||||||
| Total expenses | 4,012,776 | 3,054,571 | ||||||
| Net Investment Income | 1,708,902 | 1,648,663 | ||||||
| Realized and unrealized gains (losses) on investments | ||||||||
| Net realized gains (losses): | ||||||||
| Non-controlled, non-affiliated investments | 229,804 | 13,448 | ||||||
| Affiliated investments | - | - | ||||||
| Controlled investments | - | - | ||||||
| Total net realized gains (losses) | 229,804 | 13,448 | ||||||
| Net change in unrealized gains (losses): | ||||||||
| Non-controlled, non-affiliated investments | 1,364,243 | 1,523,099 | ||||||
| Affiliated investments | 2,431,263 | 715,537 | ||||||
| Controlled investments | (1,200,373 | ) | 51,169 | |||||
| Total net change in unrealized gains (losses) | 2,595,133 | 2,289,805 | ||||||
| Total realized and unrealized gains (losses) | 2,824,937 | 2,303,253 | ||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 4,533,839 | $ | 3,951,916 | ||||
| Weighted average basic and diluted earnings per common share | $ | 2.19 | $ | 1.88 | ||||
| Weighted average common shares outstanding - basic and diluted (see Note 11) | 2,072,694 | 2,100,876 | ||||||
FAQ
What was the growth percentage in NAV per share for PhenixFIN Corporation in the first quarter of 2024?
What was the total investment income reported by PhenixFIN Corporation in the first quarter of 2024?
What was the weighted average yield on debt and other income producing investments for PhenixFIN Corporation in the first quarter of 2024?
What is the significance of the 4 portfolio company investments on non-accrual status with a fair market value of $8.9 million for PhenixFIN Corporation?
