PhenixFIN Corporation Announces Fiscal Third Quarter 2022 Financial Results

Rhea-AI Summary

PhenixFIN Corporation (NASDAQ: PFX) reported its fiscal Q3 2022 results, showing total investment income of $3.7 million and net investment income of $0.2 million. As of June 30, 2022, net asset value (NAV) stood at $129.1 million, or $58.74 per share, up from $57.08 per share a year earlier. The company noted a weighted average yield to maturity of 9.09% on debt investments. Market volatility led to a net unrealized depreciation of $9.2 million, yet the company maintains confidence in its investments and continues to grow FlexFIN, which has received over $40 million in allocations.

Positive

• Total investment income increased to $3.7 million.
• Net asset value reached $129.1 million, or $58.74 per share.
• Weighted average yield to maturity of 9.09% on debt investments.
• FlexFIN has over $40 million allocated, generating positive cash flow.

Negative

• Net unrealized depreciation of $9.2 million due to market volatility.
• Net realized loss of $0.2 million recorded during the quarter.
• Six portfolio investments on non-accrual status, valued at $12.4 million.

NEW YORK, Aug. 09, 2022 (GLOBE NEWSWIRE) -- PhenixFIN Corporation (NASDAQ: PFX) (the "Company"), a publicly traded business development company, today announced its financial results for the fiscal third quarter of 2022.

Highlights

• During the third quarter total investment income of $3.7 million; net investment income of $0.2 million
• Net asset value (NAV) of $129.1 million, or $58.74 per share as of June 30, 2022, vs. $57.08 per share as of September 30, 2021
• Weighted average yield to maturity of 9.09% on debt investments
• FlexFIN continues to grow with over $40 million allocated to the business

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

“During the third quarter the portfolio performed relatively well given the market environment as we continued generating positive Net Investment Income. While during the quarter the portfolio was impacted by increasing broader market volatility, global instability, inflation and rising interest rates, we remain confident in the underlying investments. With a strong balance sheet and low leverage, we believe we continue to position the Company to grow NII through successful capital deployment while remaining prudent and judicious in terms of these new investments. FlexFIN continued to grow with over $40 million allocated to the unique business at quarter end generating a meaningful cash flow stream for the Company.”

Since our internalization on January 1, 2021, we generated proceeds from the monetization of positions totaling $142.0 million and deployed $175.9 million across new and add on investments. In addition, we continue to execute on our share repurchase program.

Selected Third Quarter 2022 Financial Results

For the quarter ended June 30, 2022, total investment income totaled $3.7 million, of which $3.5 million was attributable to portfolio interest and dividend income and $0.2 million was attributable to fee and other income.

For the quarter ended June 30, 2022, total net expenses were $3.5 million and total net investment income was $0.2 million.

For the quarter ended June 30, 2022, the Company recorded a net realized loss of $0.2 million and net unrealized depreciation of $9.2 million largely due to market volatility in various investments.

Portfolio and Investment Activities

As of June 30, 2022, the fair value of the Company's investment portfolio totaled $182.8 million and consisted of 45 portfolio companies.

As of June 30, 2022, the Company had 6 portfolio company investments on non-accrual status with a fair market value of $12.4 million.

Liquidity and Capital Resources

At June 30, 2022, the Company had $24.4 million in cash 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 net investment income, reduce operating expenses for a sustainable period of time, implement its investment objective, capitalize on investment opportunities, grow its net asset value and perform well and operate effectively under an internalized management structure, 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

		June 30, 2022 (Unaudited)				September 30, 2021
Assets:
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $135,629,418 and $92,214,167, respectively)		$	115,937,311			$	84,152,678
Affiliated investments (amortized cost of $44,288,170 and $75,963,427, respectively)			17,390,505				57,595,245
Controlled investments (amortized cost of $77,098,614 and $39,490,097, respectively)			49,455,289				9,891,860
Total Investments at fair value			182,783,105				151,639,783
Cash and cash equivalents			24,382,766				69,433,256
Receivables:
Fees receivable			-				1,872,700
Interest receivable			1,262,193				371,576
Paydown receivable			168,866				292,015
Due from Affiliate			132,763				-
Dividends receivable			269,330				81,211
Prepaid share repurchases			96,096				-
Other assets			866,821				1,401,746
Total Assets		$	209,961,940			$	225,092,287
Liabilities:
Notes payable (net of debt issuance costs of $2,162,356 and $412,795, respectively)		$	77,859,444			$	77,434,005
Interest and fees payable			503,125				-
Due to affiliates			-				280,323
Due to broker			-				1,586,000
Administrator expenses payable			67,028				67,920
Distributions payable			265,798				-
Accounts payable and accrued expenses			1,299,858				1,416,524
Deferred revenue			279,032				-
Other liabilities			606,675				613,534
Total Liabilities			80,880,960				81,398,306
Commitments and Contingencies
Net Assets:
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,197,418 and 2,517,221 common shares outstanding, respectively			2,198				2,517
Capital in excess of par value			675,707,499				688,866,642
Total distributable earnings (loss)			(546,628,717	)			(545,175,178	)
Total Net Assets		$	129,080,980			$	143,693,981
Total Liabilities and Net Assets		$	209,961,940			$	225,092,287
Net Asset Value Per Common Share		$	58.74			$	57.08

PHENIXFIN CORPORATION
Consolidated Statements of Operations
(Unaudited)

		For the Three Months Ended June 30								For the Nine Months Ended June 30
		2022				2021				2022				2021
Interest Income:
Interest from investments
Non-controlled, non-affiliated investments:
Cash		$	1,468,171			$	1,578,657			$	3,748,190			$	4,785,374
Payment in-kind			102,063				186,733				340,636				356,762
Affiliated investments:
Cash			(23,496	)			249,157				486,569				797,776
Payment in-kind			93,275				286,444				283,036				286,444
Controlled investments:
Cash			4,375				-				1,365,035				-
Total interest income			1,644,388				2,300,991				6,223,466				6,226,356
Dividend income			1,846,507				6,307,408				3,463,386				20,979,143
Interest from cash and cash equivalents			9,255				3,862				18,025				5,308
Fee income			65,014				71,443				420,279				650,323
Other income			93,394				-				323,828				78,204
Total Investment Income			3,658,558				8,683,704				10,448,984				27,939,334
Expenses:
Base management fees			-				-				-				1,146,403
Interest and financing expenses			1,201,623				1,260,825				3,910,361				4,538,520
General and administrative expenses			362,989				294,022				849,684				856,396
Salaries and benefits			1,037,602				679,229				1,973,770				1,011,546
Administrator expenses			58,881				106,578				210,162				546,372
Insurance expenses			155,449				444,832				469,803				1,404,312
Directors fees			164,500				179,000				540,000				875,217
Professional fees, net			469,550				289,200				936,895				113,797
Total expenses			3,450,594				3,253,686				8,890,675				10,492,563
Net Investment Income			207,964				5,430,018				1,558,309				17,446,771
Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Non-controlled, non-affiliated investments			(188,638	)			38,852				749,791				4,093,500
Affiliated investments			-				19,811				14,737,897				(10,433,117	)
Controlled investments			925				1,850				1,850				(40,145,720	)
Total net realized gains (losses)			(187,713	)			60,513				15,489,538				(46,485,337	)
Net change in unrealized gains (losses):
Non-controlled, non-affiliated investments			(9,623,302	)			(1,794,173	)			(11,630,618	)			(773,501	)
Affiliated investments			405,381				1,513,353				(8,529,483	)			(2,072,831	)
Controlled investments			(31,533	)			1,759,025				1,954,912				40,325,544
Total net change in unrealized gains (losses)			(9,249,454	)			1,478,205				(18,205,189	)			37,479,212
Loss on extinguishment of debt			-				-				(296,197	)			(122,355	)
Total realized and unrealized gains (losses)			(9,437,167	)			1,538,718				(3,011,848	)			(9,128,480	)
Net Increase (Decrease) in Net Assets Resulting from Operations		$	(9,229,203	)		$	6,968,736			$	(1,453,539	)		$	8,318,291
Weighted Average Basic and Diluted Earnings Per Common Share		$	(4.19	)		$	2.60			$	(0.61	)		$	3.07
Weighted Average Basic and Diluted Net Investment Income (Loss) Per Common Share		$	0.09			$	2.02			$	0.66			$	6.44
Weighted Average Common Shares Outstanding - Basic and Diluted			2,202,115				2,683,093				2,372,849				2,707,794

FAQ

What were PhenixFIN Corporation's Q3 2022 financial results?

PhenixFIN's Q3 2022 results showed total investment income of $3.7 million and net investment income of $0.2 million.

What is the net asset value of PhenixFIN as of June 30, 2022?

As of June 30, 2022, PhenixFIN's net asset value was $129.1 million, or $58.74 per share.

How did market volatility affect PhenixFIN's portfolio?

Market volatility led to a net unrealized depreciation of $9.2 million in PhenixFIN's portfolio.

What is the significance of FlexFIN for PhenixFIN Corporation?

FlexFIN has over $40 million allocated and continues to generate meaningful cash flow for PhenixFIN.

What are the risks associated with PhenixFIN's investments?

PhenixFIN had six portfolio investments on non-accrual status, valued at $12.4 million, indicating potential risks.