PhenixFIN Corporation Announces Fiscal Fourth Quarter 2022 Financial Results

Rhea-AI Summary

PhenixFIN Corporation (NASDAQ: PFX) reported its fiscal Q4 2022 results, revealing a total investment income of $5.1 million and a net investment income of $1.9 million. The net asset value (NAV) increased to $120.8 million, or $57.49 per share. The company secured a $50 million credit facility with Woodforest National Bank, enhancing liquidity for investments and redeeming $22.5 million of unsecured notes due in March 2023. The total value of the investment portfolio stood at $193.0 million, with a weighted average yield of 10.85%.

Positive

• Secured a $50 million credit facility, strengthening balance sheet and liquidity.
• Increased net asset value to $120.8 million, or $57.49 per share.
• Successfully repurchased 16.5% of outstanding shares during FY2022.
• Generated positive net investment income of $1.9 million despite market challenges.

Negative

• Recorded a net realized loss of $10.3 million from the sale of a legacy investment.
• Total net expenses were $3.2 million, affecting overall profitability.
• Had investments with a fair market value of $5.2 million on non-accrual status.

NEW YORK, Dec. 16, 2022 (GLOBE NEWSWIRE) -- PhenixFIN Corporation (NASDAQ: PFX) (the "Company"), a publicly traded business development company, today announced its financial results for the fiscal fourth quarter of 2022.

Highlights

• Fourth quarter total investment income was $5.1 million; net investment income of $1.9 million
• Net asset value (NAV) of $120.8 million, or $57.49 per share as of September 30, 2022, vs. $57.08 per share as of September 30, 2021
• Secured a 3-year $50 million credit facility with Woodforest National Bank as lead lender (SOFR + 2.90%)
• Notice of Redemption issued for the $22.5 million 6.125% unsecured notes due March 30, 2023
• Repurchased 16.5% of shares outstanding in Fiscal Year 2022
• Weighted average yield to maturity of 10.85% on yield-oriented investments
• FlexFIN continues to grow with over $40 million allocated to the business
  

David Lorber, Chief Executive Officer of the Company, stated:

“We are pleased to announce the signing of a $50mm credit facility led by Woodforest National Bank which we believe further strengthens our balance sheet. With this increased liquidity we will be redeeming the $22.5 million 6.125% unsecured notes due March 30, 2023. This facility should also allow us to expand our investment activity to continue to grow. During the fourth quarter, the portfolio continued to perform given the market environment as we continued generating positive Net Investment Income driven by the deployment of cash balances, the rising interest rate environment, and the general stability in our portfolio. In addition, during our FY2022 we successfully took advantage of our trading discount to NAV through buying back 16.5% of our shares outstanding. Given the volatility of 2022, as we look forward, we are excited about opportunities in the markets to generate returns through both attractive yields and capital appreciation.”

The Company expects to hold an investor update call in early 2023. Details will be announced at a later date.

Selected Fourth Quarter 2022 Financial Results

For the quarter ended September 30, 2022, total investment income totaled $5.1 million, of which $5.0 million was attributable to portfolio interest and dividend income and $0.1 million was attributable to other income.

For the quarter ended September 30, 2022, total net expenses were $3.2 million and total net investment income was $1.9 million.

For the quarter ended September 30, 2022, the Company recorded a net realized loss of $10.3 million, due to the sale of Path Medical, a legacy investment, and net unrealized loss of $3.7 million, due largely to market volatility in various investments.

Portfolio and Investment Activities

As of September 30, 2022, the fair value of the Company's investment portfolio totaled $193.0 million and consisted of 44 portfolio companies.

As of September 30, 2022, the Company had 5 portfolio company investments on non-accrual status with a fair market value of $5.2 million.

Liquidity and Capital Resources

At September 30, 2022, the Company had $22.8 million in cash and cash equivalents and $57.5 million and $22.5 million outstanding in aggregate principal amount of its 5.25% unsecured notes due 2028 and 6.125% unsecured notes due 2023, respectively.

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, capitalize on investment opportunities, grow its net asset value and perform well in the prevailing market environment, FlexFIN’s ability to perform effectively and generate attractive returns 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

		September 30, 2022				September 30, 2021
Assets:
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $147,378,917 and $92,214,167, respectively)		$	122,616,275			$	84,152,678
Affiliated investments (amortized cost of $30,585,884 and $75,963,427, respectively)			12,314,192				57,595,245
Controlled investments (amortized cost of $85,483,093 and $39,490,097, respectively)			58,026,182				9,891,860
Total Investments at fair value			192,956,649				151,639,783
Cash and cash equivalents			22,768,066				69,433,256
Receivables:
Fees receivable			-				1,872,700
Interest receivable			727,576				371,576
Prepaid share repurchase			489,156				-
Due from affiliates			271,962				-
Dividends receivable			269,330				81,211
Paydown receivable			112,500				292,015
Other receivable			36,992				-
Other assets			1,242,677				1,401,746
Total Assets		$	218,874,908			$	225,092,287
Liabilities:
Notes payable (net of debt issuance costs of $2,059,164 and $412,795, respectively)		$	77,962,636			$	77,434,005
Due to broker			16,550,000				1,586,000
Accounts payable and accrued expenses			2,040,277				1,416,524
Due to affiliate			-				280,323
Administrator expenses payable			74,911				67,920
Interest and fees payable			503,125				-
Deferred revenue			325,602				-
Other liabilities			572,949				613,534
Total Liabilities			98,029,500				81,398,306
Commitments and Contingencies
Net Assets:
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,102,129 and 2,517,221 common shares outstanding, respectively			2,102				2,517
Capital in excess of par value			675,401,802				688,866,642
Total distributable earnings (loss)			(554,558,496	)			(545,175,178	)
Total Net Assets			120,845,408				143,693,981
Total Liabilities and Net Assets		$	218,874,908			$	225,092,287
Net Asset Value Per Common Share		$	57.49			$	57.08

PHENIXFIN CORPORATION
Consolidated Statements of Operations

		For the Years Ended September 30
		2022				2021				2020
Interest Income:
Interest from investments
Non-controlled, non-affiliated investments:
Cash		$	5,207,850			$	5,974,807			$	9,137,394
Payment in-kind			444,741				609,964				863,744
Affiliated investments:
Cash			639,733				1,099,809				1,182,294
Payment in-kind			374,981				327,804				2,425,557
Controlled investments:
Cash			2,489,381				75,000				84,505
Payment in-kind			-				-				500,767
Total interest income			9,156,686				8,087,384				14,194,261
Dividend income			5,503,425				21,564,348				6,256,250
Interest from cash and cash equivalents			139,942				10,402				378,077
Fee income			420,279				2,566,519				692,988
Other income			323,828				78,204				-
Total Investment Income			15,544,160				32,306,857				21,521,576
Expenses:
Base management fees			-				1,146,403				6,358,750
Interest and financing expenses			5,113,105				5,800,100				14,935,017
Salaries and benefits			2,952,106				1,993,277				-
General and administrative expenses			1,103,125				1,012,147				3,285,259
Directors fees			712,000				1,039,717				1,451,077
Insurance expenses			590,178				1,619,536				1,463,391
Administrator expenses			301,281				612,983				2,226,831
Professional fees, net			1,340,828				559,975				(4,768,050	)
Expenses before expense support reimbursement			12,112,623				13,784,138				24,952,275
Expense support reimbursement			-				-				(710,294	)
Total expenses net of expense support reimbursement			12,112,623				13,784,138				24,241,981
Net Investment Income (Loss)			3,431,537				18,522,719				(2,720,405	)
Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Non-controlled, non-affiliated investments			810,240				7,747,672				(9,973,416	)
Affiliated investments			4,408,961				(10,088,405	)			(928,990	)
Controlled investments			1,850				(40,144,795	)			(39,076,425	)
Total net realized gains (losses)			5,221,051				(42,485,528	)			(49,978,831	)
Net change in unrealized gains (losses):
Non-controlled, non-affiliated investments			(16,701,153	)			(5,022,484	)			9,898,237
Affiliated investments			96,490				(10,342,450	)			2,648,353
Controlled investments			2,141,326				40,728,006				(23,178,993	)
Total net change in unrealized gains (losses)			(14,463,337	)			25,363,072				(10,632,403	)
Loss on extinguishment of debt			(296,197	)			(122,355	)			(2,481,374	)
Total realized and unrealized gains (losses)			(9,538,483	)			(17,244,811	)			(63,092,608	)
Net Increase (Decrease) in Net Assets Resulting from Operations		$	(6,106,946	)		$	1,277,908			$	(65,813,013	)
Weighted average basic and diluted earnings per common share		$	(2.63	)		$	0.48			$	(24.16	)
Weighted average basic and diluted net investment income (loss) per common share		$	1.48			$	6.92			$	(1.00	)
Weighted average common shares outstanding - basic and diluted			2,323,601				2,677,891				2,723,709
Dividends declared per common share		$	0.12			$	-			$	-

FAQ

What were PhenixFIN's total investment income and net investment income for Q4 2022?

PhenixFIN reported a total investment income of $5.1 million and a net investment income of $1.9 million for Q4 2022.

What is the net asset value (NAV) per share for PhenixFIN as of September 30, 2022?

The net asset value (NAV) per share for PhenixFIN as of September 30, 2022, was $57.49.

How much did PhenixFIN secure in its new credit facility?

PhenixFIN secured a $50 million credit facility with Woodforest National Bank.

What losses did PhenixFIN report in Q4 2022 related to investments?

PhenixFIN recorded a net realized loss of $10.3 million and a net unrealized loss of $3.7 million in Q4 2022.

How much did PhenixFIN repurchase in shares during FY2022?

PhenixFIN repurchased 16.5% of its outstanding shares during FY2022.