PhenixFIN Corporation Announces Fiscal Second Quarter 2024 Financial Results

Rhea-AI Summary

PhenixFIN (NASDAQ: PFX, PFXNZ) reported a strong fiscal second quarter of 2024 with a net asset value (NAV) growth of 22% over the last 12 months. The company's total investment income was $4.7 million, with a net investment income of $0.6 million. They repurchased 40,000 shares and increased their Credit Facility to $62.5 million. The Board of Directors declared a special dividend of $1.31 per share. The fair value of the investment portfolio was $220.0 million, consisting of 41 portfolio companies.

Positive

• Net asset value (NAV) grew by 22% over the last 12 months, showcasing strong financial performance and growth potential.

• Total investment income reached $4.7 million, reflecting a robust revenue stream from portfolio interest and dividend income.

• The Credit Facility was expanded to $62.5 million, indicating increased financial flexibility and potential for further investment opportunities.

• Repurchased 40,000 shares, demonstrating confidence in the company's value and commitment to enhancing shareholder returns.

• Declared a special dividend of $1.31 per share, rewarding stockholders and showcasing the company's ability to generate excess income.

Negative

• Total expenses amounted to $4.1 million, highlighting the importance of cost management to maintain profitability.

• Although net investment income was positive at $0.6 million, there is room for improvement to ensure sustained profitability.

Insights

Financial Analyst

PhenixFIN Corporation's announcement of a 22% growth in NAV per share over the past year signifies a robust financial performance and reflects positively on their investment strategies. The growth in NAV is a key indicator of the company's asset value and this upward trajectory should instill confidence in investors regarding the company's health. Their ability to expand the credit facility to $62.5 million also indicates a strong credit profile and potential for future investments. However, the reported net investment income of $0.6 million on total investment income of $4.7 million points to relatively high expenses, which investors should monitor for future efficiency gains. The special dividend of $1.31 per share suggests that the company is generating sufficient spillover income, which can be appealing to income-focused investors. While the share repurchase during the quarter underlines management's belief in the company's valuation, investors should assess the long-term impact of such buybacks on the company's capital structure. Overall, these results appear positive.

Market Research Analyst

Considering PhenixFIN Corporation operates within the business development company (BDC) sector, the weighted average yield of 13.6% on debt and other income-producing investments is notably high and indicative of a potentially higher risk-return profile compared to industry averages. Investors should evaluate the risk associated with such yields, alongside the portfolio diversification of 41 companies. The company's liquidity position, with $19.1 million in cash and the manageable debt profile shown by $57.5 million in notes and $28.4 million under the credit facility, suggests financial stability and operational flexibility. Additionally, the special dividend declaration often has a positive sentiment attached; however, it's also important for investors to consider the company's long-term ability to sustain such payouts.

NAV Per Share Grew 22% In Last 12 Months
Expanded Credit Facility To $62.5 Million

NEW YORK, May 10, 2024 (GLOBE NEWSWIRE) --  PhenixFIN Corporation (NASDAQ: PFX, PFXNZ) (the "Company"), a publicly traded business development company, today announced its financial results for the fiscal second quarter of 2024.

Highlights

• Second quarter total investment income of $4.7 million; net investment income of $0.6 million
• Net asset value (NAV) of $154.3 million, or $76.35 per share as of March 31, 2024
• Weighted average yield was 13.6% on debt and other income producing investments
• Repurchased 40,000 shares during the second fiscal quarter
• On February 21, 2024, the Credit Facility was amended to increase the principal amount available to $62.5 million.
• On May 9, 2024 the Board of Directors declared a special dividend of $1.31 per share. This dividend is payable on June 10, 2024 to stockholders of record as of May 27, 2024.

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

“We continue to be pleased with our progress in growing our NAV per share as various investments have generated favorable investment income and/or capital appreciation. We continue to pursue NAV per share growth over time. We are also excited for potential future investments that should provide additional growth opportunities.

In addition, we are pleased to announce a special dividend of $1.31 per share for 2023 spillover income.”  

Selected Second Quarter 2024 Financial Results for the Quarter Ended March 31, 2024:

Total investment income was $4.7 million which was attributable to portfolio interest and dividend income.

Total expenses were $4.1 million and total net investment income was $0.6 million.

The Company recorded total realized and unrealized gains of $4.8 million due to appreciation in various investments.

Portfolio and Investment Activities for the Quarter Ended March 31, 2024:

The fair value of the Company's investment portfolio totaled $220.0 million and consisted of 41 portfolio companies.

Liquidity and Capital Resources

At March 31, 2024, the Company had $19.1 million in cash and cash equivalents, $57.5 million in aggregate principal amount of its 5.25% unsecured notes due 2028 and $28.4 million outstanding under the Credit Facility.

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, make additional acquisitions that provide additional growth opportunities, 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 (NAV) and NAV per share 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
		March 31, 2024 (Unaudited)				September 30, 2023
Assets:
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $138,055,022 and $134,339,121 respectively)		$	132,407,942			$	125,531,031
Affiliated investments (amortized cost of $20,564,242 and $48,233,910, respectively)			14,333,867				37,289,617
Controlled investments (amortized cost of $90,793,284 and $82,437,692, respectively)			73,307,525				63,640,043
Total Investments at fair value			220,049,334				226,460,691
Cash and cash equivalents			19,123,796				5,988,223
Receivables:
Interest receivable			920,769				971,115
Dividends receivable			243,302				161,479
Other receivable			-				31,425
Due from Affiliate			5,326,933				409,214
Other assets			1,173,608				833,000
Deferred financing costs			724,568				699,124
Prepaid share repurchase			132,295				199,019
Receivable for investments sold			-				3,940,175
Total Assets		$	247,694,605			$	239,693,465
Liabilities:
Credit facility and note payable (net of debt issuance costs of $1,522,586 and $1,688,835, respectively)		$	84,419,355			$	84,253,106
Payable for investments purchased			5,036,284				4,123,059
Accounts payable and accrued expenses			2,707,303				3,066,984
Interest and fees payable			724,564				690,398
Other liabilities			360,477				432,698
Due to Affiliate			99,725				-
Administrator expenses payable (see Note 6)			75,000				-
Deferred revenue			-				421,685
Total Liabilities			93,422,708				92,987,930
Commitments and Contingencies (see Note 8)
Net Assets:
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,020,490 and 2,073,713 common shares outstanding, respectively			2,021				2,074
Capital in excess of par value			692,472,513				694,812,239
Total distributable earnings (loss)			(538,202,637	)			(548,108,778	)
Total Net Assets			154,271,897				146,705,535
Total Liabilities and Net Assets		$	247,694,605			$	239,693,465
Net Asset Value Per Common Share		$	76.35			$	70.75

PHENIXFIN CORPORATION Consolidated Statements of Operations (Unaudited)
		For the Three Months Ended March 31,								For the Six Months Ended March 31,
		2024				2023				2024				2023
Interest Income:
Interest from investments
Non-controlled, non-affiliated investments:
Cash		$	1,950,898			$	2,116,741			$	4,633,041			$	4,032,782
Payment in-kind			90,530				119,593				181,204				225,780
Affiliated investments:
Cash			276,484				261,028				732,176				459,481
Payment in-kind			-				-				-				-
Controlled investments:
Cash			294,028				57,188				580,266				251,815
Payment in-kind			118,864				155,994				268,831				245,737
Total interest income			2,730,804				2,710,544				6,395,518				5,215,595
Dividend income			1,652,262				1,503,375				3,665,988				3,535,733
Interest from cash and cash equivalents			199,266				125,471				240,374				217,697
Fee income (see Note 9)			76,517				171,055				78,625				244,654
Other income			-				401,986				22				401,986
Total Investment Income			4,658,849				4,912,431				10,380,527				9,615,665
Expenses:
Interest and financing expenses			1,567,352				1,381,596				3,109,413				2,614,772
Salaries and benefits			1,524,508				802,090				2,949,500				1,659,623
General and administrative expenses			310,776				201,181				635,837				421,158
Professional fees, net			343,150				377,229				700,704				725,146
Directors fees			187,500				176,500				375,000				370,500
Insurance expenses			96,694				121,387				194,450				245,471
Administrator expenses (see Note 6)			57,550				77,937				135,402				155,821
Total expenses			4,087,530				3,137,920				8,100,306				6,192,491
Net Investment Income			571,319				1,774,511				2,280,221				3,423,174
Realized and unrealized gains (losses) on investments
Non-controlled, non-affiliated investments			200,754				(838,070	)			430,558				(824,622	)
Affiliated investments			(1,991,456	)			-				(1,991,456	)			-
Controlled investments			-				23,273				-				23,273
Total net realized gains (losses)			(1,790,702	)			(814,797	)			(1,560,898	)			(801,349	)
Net change in unrealized gains (losses):
Non-controlled, non-affiliated investments			1,796,767				803,513				3,161,010				2,326,612
Affiliated investments			2,282,655				274,063				4,713,918				989,600
Controlled investments			2,512,263				4,670,928				1,311,890				4,722,097
Total net change in unrealized gains (losses)			6,591,685				5,748,504				9,186,818				8,038,309
Total realized and unrealized gains (losses)			4,800,983				4,933,707				7,625,920				7,236,960
Net Increase (Decrease) in Net Assets Resulting from Operations		$	5,372,302			$	6,708,218			$	9,906,141			$	10,660,134
Weighted average basic and diluted earnings per common share		$	2.62			$	3.20			$	4.81			$	5.08
Weighted average common shares outstanding - basic and diluted (see Note 11)			2,048,622				2,095,193				2,060,723				2,098,041

FAQ

What was PhenixFIN 's net asset value (NAV) per share as of March 31, 2024?

PhenixFIN 's net asset value (NAV) per share was $76.35 as of March 31, 2024.

When is the special dividend declared by PhenixFIN payable to stockholders?

The special dividend of $1.31 per share declared by PhenixFIN is payable on June 10, 2024 to stockholders of record as of May 27, 2024.

How many shares did PhenixFIN repurchase during the second fiscal quarter of 2024?

PhenixFIN repurchased 40,000 shares during the second fiscal quarter of 2024.

What is the fair value of PhenixFIN 's investment portfolio as of March 31, 2024?

As of March 31, 2024, the fair value of PhenixFIN 's investment portfolio was $220.0 million, consisting of 41 portfolio companies.