Portman Ridge Finance Corporation Announces Third Quarter 2024 Financial Results
Portman Ridge Finance (PTMN) announced its Q3 2024 financial results. The company reported a net investment income (NII) of $5.8 million ($0.63 per share), down from $7.2 million ($0.75 per share) in Q3 2023. The net asset value (NAV) was $188.0 million ($20.36 per share), a decrease from $196.4 million ($21.21 per share) as of June 30, 2024. Total investment income for Q3 2024 was $15.2 million, compared to $18.6 million in Q3 2023. The company repurchased 33,429 shares for $0.6 million, accretive to NAV by $0.01 per share.
Portman Ridge increased its JPM Credit Facility by $85.0 million to $200.0 million, reduced the margin from 2.80% to 2.50% per annum, and extended the maturity date to August 29, 2027. The company refinanced the remaining $85.0 million of the 2018-2 Secured Notes using the amended credit facility, resulting in net spread savings of approximately 28 basis points.
The company declared a Q4 2024 distribution of $0.69 per share, payable on November 29, 2024. Despite economic uncertainties, management remains confident in the company's investment strategy and strong pipeline.
Portman Ridge Finance (PTMN) ha annunciato i risultati finanziari per il terzo trimestre del 2024. L'azienda ha riportato un reddito netto da investimenti (NII) di 5,8 milioni di dollari (0,63 dollari per azione), in calo rispetto ai 7,2 milioni di dollari (0,75 dollari per azione) del terzo trimestre del 2023. Il valore netto degli attivi (NAV) era di 188,0 milioni di dollari (20,36 dollari per azione), in diminuzione dai 196,4 milioni di dollari (21,21 dollari per azione) al 30 giugno 2024. Il reddito totale da investimenti per il terzo trimestre del 2024 è stato di 15,2 milioni di dollari, rispetto ai 18,6 milioni di dollari del terzo trimestre del 2023. L'azienda ha riacquistato 33.429 azioni per 0,6 milioni di dollari, aumentando il NAV di 0,01 dollari per azione.
Portman Ridge ha aumentato il proprio JPM Credit Facility di 85,0 milioni di dollari, portandolo a 200,0 milioni di dollari, riducendo il margine dal 2,80% al 2,50% annuo, e ha prorogato la scadenza al 29 agosto 2027. L'azienda ha rifinanziato i restanti 85,0 milioni di dollari dei 2018-2 Secured Notes utilizzando il credito ristrutturato, con un risparmio netto sui tassi di circa 28 punti base.
L'azienda ha dichiarato un pagamento per il quarto trimestre del 2024 di 0,69 dollari per azione, che sarà pagato il 29 novembre 2024. Nonostante le incertezze economiche, la direzione rimane fiduciosa nella strategia di investimento dell'azienda e nel forte portafoglio di opportunità.
Portman Ridge Finance (PTMN) anunció sus resultados financieros del tercer trimestre de 2024. La empresa reportó un ingreso neto por inversiones (NII) de 5,8 millones de dólares (0,63 dólares por acción), una disminución desde los 7,2 millones de dólares (0,75 dólares por acción) en el tercer trimestre de 2023. El valor neto de los activos (NAV) fue de 188,0 millones de dólares (20,36 dólares por acción), una caída desde los 196,4 millones de dólares (21,21 dólares por acción) al 30 de junio de 2024. El ingreso total por inversiones para el tercer trimestre de 2024 fue de 15,2 millones de dólares, en comparación con 18,6 millones de dólares en el tercer trimestre de 2023. La empresa recompró 33,429 acciones por 0,6 millones de dólares, aumentando el NAV en 0,01 dólares por acción.
Portman Ridge incrementó su JPM Credit Facility en 85,0 millones de dólares a 200,0 millones de dólares, reduciendo el margen del 2,80% al 2,50% anual, y extendió la fecha de vencimiento hasta el 29 de agosto de 2027. La empresa refinanció los restantes 85,0 millones de dólares de los 2018-2 Secured Notes utilizando la línea de crédito enmendada, lo que resultó en ahorros netos de aproximadamente 28 puntos básicos.
La empresa declaró una distribución de 0,69 dólares por acción para el cuarto trimestre de 2024, que se pagará el 29 de noviembre de 2024. A pesar de las incertidumbres económicas, la dirección se mantiene confiada en la estrategia de inversión de la empresa y en su sólida cartera de oportunidades.
Portman Ridge Finance (PTMN)는 2024년 3분기 재무 결과를 발표했습니다. 회사는 580만 달러(주당 0.63달러)의 순 투자 소득(NII)를 보고했으며, 이는 2023년 3분기의 720만 달러(주당 0.75달러)에서 감소한 수치입니다. 순 자산 가치(NAV)는 1억 8800만 달러(주당 20.36달러)로, 2024년 6월 30일 기준 1억 9640만 달러(주당 21.21달러)에서 감소했습니다. 2024년 3분기의 총 투자 소득은 1520만 달러로, 2023년 3분기의 1860만 달러와 비교됩니다. 회사는 33,429주를 60만 달러에 재매입하여 NAV를 주당 0.01달러 증가시켰습니다.
Portman Ridge는 JPM Credit Facility를 8500만 달러 증가시켜 2억 달러로 하였으며, 이자율을 연 2.80%에서 2.50%로 감소시키고 만기일을 2027년 8월 29일로 연장했습니다. 회사는 개정된 신용 시설을 이용하여 2018-2 Secured Notes의 나머지 8500만 달러를 재융자하였으며, 그 결과 약 28bp의 순 절감 효과가 있었습니다.
회사는 2024년 4분기에 주당 0.69달러의 배당금을 선언하였으며, 이는 2024년 11월 29일에 지급될 예정입니다. 경제적 불확실성에도 불구하고 경영진은 회사의 투자 전략과 강력한 기회 파이프라인에 대한 믿음을 유지하고 있습니다.
Portman Ridge Finance (PTMN) a annoncé ses résultats financiers pour le troisième trimestre 2024. La société a rapporté un revenu net d'investissement (NII) de 5,8 millions de dollars (0,63 dollar par action), en baisse par rapport aux 7,2 millions de dollars (0,75 dollar par action) du troisième trimestre 2023. La valeur nette des actifs (NAV) était de 188,0 millions de dollars (20,36 dollars par action), une diminution par rapport aux 196,4 millions de dollars (21,21 dollars par action) au 30 juin 2024. Le revenu total d'investissement pour le troisième trimestre 2024 était de 15,2 millions de dollars, contre 18,6 millions de dollars pour le troisième trimestre 2023. La société a racheté 33 429 actions pour 0,6 million de dollars, ce qui a contribué à augmenter le NAV de 0,01 dollar par action.
Portman Ridge a augmenté son JPM Credit Facility de 85,0 millions de dollars à 200,0 millions de dollars, réduit la marge de 2,80 % à 2,50 % par an, et prolongé la date d'échéance au 29 août 2027. L'entreprise a refinancé les 85,0 millions de dollars restants des 2018-2 Secured Notes en utilisant la ligne de crédit modifiée, entraînant des économies nettes d'environ 28 points de base.
L'entreprise a déclaré une distribution de 0,69 dollar par action pour le quatrième trimestre 2024, qui sera versée le 29 novembre 2024. Malgré les incertitudes économiques, la direction reste confiante dans la stratégie d'investissement de l'entreprise et son solide portefeuille d'opportunités.
Portman Ridge Finance (PTMN) hat seine finanziellen Ergebnisse für das 3. Quartal 2024 bekannt gegeben. Das Unternehmen berichtete von einem netto Investitionseinkommen (NII) von 5,8 Millionen Dollar (0,63 Dollar pro Aktie), was einem Rückgang von 7,2 Millionen Dollar (0,75 Dollar pro Aktie) im 3. Quartal 2023 entspricht. Der Nettovermögenswert (NAV) betrug 188,0 Millionen Dollar (20,36 Dollar pro Aktie), ein Rückgang von 196,4 Millionen Dollar (21,21 Dollar pro Aktie) zum 30. Juni 2024. Das Gesamteinkommen aus Investitionen für das 3. Quartal 2024 betrug 15,2 Millionen Dollar im Vergleich zu 18,6 Millionen Dollar im 3. Quartal 2023. Das Unternehmen hat 33.429 Aktien für 0,6 Millionen Dollar zurückgekauft, was den NAV um 0,01 Dollar pro Aktie erhöht hat.
Portman Ridge hat seine JPM Credit Facility um 85,0 Millionen Dollar auf 200,0 Millionen Dollar erhöht, den Zinssatz von 2,80 % auf 2,50 % pro Jahr gesenkt und das Fälligkeitsdatum auf den 29. August 2027 verlängert. Das Unternehmen hat die verbleibenden 85,0 Millionen Dollar der 2018-2 Secured Notes unter Verwendung der geänderten Kreditfazilität refinanziert, was zu einer Nettozinseinsparung von etwa 28 Basispunkten führte.
Das Unternehmen erklärte eine Ausschüttung von 0,69 Dollar pro Aktie für das 4. Quartal 2024, die am 29. November 2024 ausgezahlt wird. Trotz wirtschaftlicher Unsicherheiten bleibt das Management zuversichtlich bezüglich der Investitionsstrategie des Unternehmens und seiner starken Projektpipeline.
- Declared Q4 2024 distribution of $0.69 per share.
- Increased JPM Credit Facility by $85.0 million and reduced margin to 2.50%.
- Net spread savings of approximately 28 basis points from refinancing.
- Net investment income decreased to $5.8 million from $7.2 million in Q3 2023.
- Net asset value decreased to $188.0 million from $196.4 million as of June 30, 2024.
- Total investment income declined to $15.2 million from $18.6 million in Q3 2023.
Reports Net Investment Income of
Recurring PIK Income as a Percentage of Total Investment Income Declines by Over 200 Basis Points
Continued Share Repurchase Program: Total of 33,429 Shares for an Aggregate Cost of Approximately
Announces Fourth Quarter 2024 Quarterly Distribution of
NEW YORK, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “Portman Ridge”) announced today its financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights
- Total investment income for the third quarter of 2024 was
$15.2 million , as compared to$16.3 million for the second quarter of 2024, and$18.6 million for the third quarter of 2023. - Core investment income¹, excluding the impact of purchase price accounting, for the third quarter of 2024 was
$15.2 million , as compared to$16.2 million for the second quarter of 2024, and$18.3 million for the third quarter of 2023. - Net investment income (“NII”) for the third quarter of 2024 was
$5.8 million ($0.63 per share) as compared to$6.5 million ($0.70 per share) in the second quarter of 2024, and$7.2 million ($0.75 per share) for the third quarter of 2023. - Net asset value (“NAV”), as of September 30, 2024, was
$188.0 million ($20.36 per share), as compared to NAV of$196.4 million ($21.21 per share) as of June 30, 2024. - Total shares repurchased in open market transactions under the Renewed Stock Repurchase Program during the quarter ended September 30, 2024, were 33,429 shares at an aggregate cost of approximately
$0.6 million , which was accretive to NAV by$0.01 per share. - In July, the Company amended the terms of the senior secured revolving credit facility (“JPM Credit Facility”) with JPMorgan Chase Bank, National Association (“JPM”) by increasing the aggregate principal amount by
$85.0 million , for a total of$200.0 million , and reduced the applicable margin from2.80% per annum to2.50% per annum. Additionally, the reinvestment period was extended from April 29, 2025 to August 29, 2026, and the maturity date was extended from April 29, 2026 to August 29, 2027. Finally, using the amended JPM Credit Facility, the Company refinanced the remaining$85.0 million of the Senior Secured Notes, due November 20, 2029 and issued by Portman Ridge Funding 2018-2 LLC (the “2018-2 Secured Notes”), on August 20, 2024.
Subsequent Events
- On November 7, 2024, the Company declared a cash distribution of
$0.69 per share of common stock. The distribution is payable on November 29, 2024 to stockholders of record at the close of business on November 19, 2024.
Management Commentary
Ted Goldthorpe, Chief Executive Officer of Portman Ridge, stated, “Following the strong earnings we saw in the first half of 2024, the Company’s third quarter earnings were temporarily impacted by prudent cash and portfolio management initiatives prior to successfully refinancing the 2018-2 Secured Notes. However, I am very pleased with the work we did on the right-side of the balance sheet and the substantial improvements we made to the Company’s debt capital structure. Specifically, the Company upsized and termed out the JPM Credit Facility, while also reducing the spread by a full 30 basis points. Further, using the upsized and lower cost JPM Credit Facility, the Company refinanced the remaining
With that in mind, we continue to believe our stock remains undervalued and thus we continued repurchasing shares during the third quarter of 2024 under our Rule 10b-5 stock repurchase program. Specifically, during the quarter ended September 30, 2024, the Company repurchased 33,429 shares in the open market for an aggregate cost of approximately
Looking ahead to the final quarter of 2024 and the beginning of 2025, with the Company’s balance sheet fortified by the amended lower cost JPM Credit Facility, we expect to be active in the market and net deployers of the Company’s capital which we believe will restore net investment income back in line with more normalized levels. Above all, despite the current economic uncertainty and a dynamic interest rate environment, we remain confident in our prudent investment strategy, strong pipeline, and experienced management team, and believe the Company remains well positioned with strong spillover earnings to continue to deliver positive returns to our shareholders.”
Selected Financial Highlights
- Total investment income for the quarter ended September 30, 2024, was
$15.2 million , of which$12.7 million was attributable to interest income, inclusive of payment-in-kind income, from the Debt Securities Portfolio. This compares to total investment income of$18.6 million for the quarter ended September 30, 2023, of which$15.8 million was attributable to interest income, inclusive of payment-in-kind income, from the Debt Securities Portfolio. - Core investment income for the third quarter of 2024, excluding the impact of purchase discount accretion, was
$15.2 million , a decrease of$3.1 million as compared to core investment income of$18.3 million for the third quarter of 2023. - Net investment income (“NII”) for the third quarter of 2024 was
$5.8 million ($0.63 per share) as compared to$7.2 million ($0.75 per share) for the third quarter of 2023. - Non-accruals on debt investments, as of September 30, 2024, were nine debt investments representing
1.6% and4.5% of the Company’s investment portfolio at fair value and amortized cost, respectively. This compares to nine debt investments representing0.5% and4.5% of the Company’s investment portfolio at fair value and amortized cost, respectively, as of June 30, 2024. - Total investments at fair value as of September 30, 2024, were
$429.0 million and consisted of investments in 95 portfolio companies. The debt investment portfolio at fair value as of September 30, 2024 was$347.0 million , which excludes CLO Funds and Joint Ventures, and was comprised of 72 different portfolio companies across 28 different industries with an average par balance per entity of approximately$2.7 million . This compares to total investments of$444.4 million at fair value as of June 30, 2024 and consisted of investments in 92 portfolio companies. The debt investment portfolio at fair value as of June 30, 2024 was$358.9 million , which excludes CLO Funds and Joint Ventures, and was comprised of 75 different portfolio companies across 28 different industries with an average par balance per entity of approximately$2.6 million . - Weighted average contractual interest rate on our interest earning Debt Securities Portfolio as of September 30, 2024 was approximately
11.9% . - Par value of outstanding borrowings, as of September 30, 2024, was
$267.5 million compared to$285.1 million as of June 30, 2024, with an asset coverage ratio of total assets to total borrowings of170% and169% , respectively. On a net basis, leverage as of September 30, 2024 was 1.3x² compared to net leverage of 1.3x² as of June 30, 2024.
Results of Operations
Operating results for the three months ended September 30, 2024, and September 30, 2023, were as follows:
For the Three Months Ended September 30, | |||||||||
($ in thousands, except share and per share amounts) | 2024 | 2023 | |||||||
Total investment income | $ | 15,177 | $ | 18,574 | |||||
Total expenses | 9,375 | 11,408 | |||||||
Net Investment Income | 5,802 | 7,166 | |||||||
Net realized gain (loss) on investments | (11,419 | ) | (1,636 | ) | |||||
Net change in unrealized gain (loss) on investments | 4,511 | 1,708 | |||||||
Tax (provision) benefit on realized and unrealized gains (losses) on investments | — | 264 | |||||||
Net realized and unrealized appreciation (depreciation) on investments, net of taxes | (6,908 | ) | 336 | ||||||
Net realized gain (loss) on extinguishment of debt | (403 | ) | (57 | ) | |||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,509 | ) | $ | 7,445 | ||||
Net Increase (Decrease) In Net Assets Resulting from Operations per Common Share: | |||||||||
Basic and Diluted: | $ | (0.16 | ) | $ | 0.78 | ||||
Net Investment Income Per Common Share: | |||||||||
Basic and Diluted: | $ | 0.63 | $ | 0.75 | |||||
Weighted Average Shares of Common Stock Outstanding — Basic and Diluted | 9,244,033 | 9,505,172 |
Investment Income
The composition of our investment income for the three and nine months ended September 30, 2024, and September 30, 2023, was as follows:
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||
Interest income, excluding CLO income and purchase discount accretion | $ | 11,434 | $ | 13,174 | $ | 35,109 | $ | 41,436 | ||||||||||||
Purchase discount accretion | 25 | 238 | 210 | 1,706 | ||||||||||||||||
PIK income | 1,552 | 2,421 | 5,759 | 4,987 | ||||||||||||||||
CLO income | 254 | 502 | 1,335 | 1,879 | ||||||||||||||||
JV income | 1,669 | 2,073 | 5,122 | 6,861 | ||||||||||||||||
Fees and other income | 243 | 166 | 505 | 1,658 | ||||||||||||||||
Investment Income | $ | 15,177 | $ | 18,574 | $ | 48,040 | $ | 58,527 | ||||||||||||
Less: Purchase discount accretion | $ | (25 | ) | $ | (238 | ) | $ | (210 | ) | $ | (1,706 | ) | ||||||||
Core Investment Income | $ | 15,152 | $ | 18,336 | $ | 47,830 | $ | 56,821 |
Fair Value of Investments
The composition of our investment portfolio as of September 30, 2024, and December 31, 2023, at cost and fair value was as follows:
($ in thousands) | September 30, 2024 | December 31, 2023 | ||||||||||||||||||||||
Security Type | Cost/Amortized Cost | Fair Value | Fair Value Percentage of Total Portfolio | Cost/Amortized Cost | Fair Value | Fair Value Percentage of Total Portfolio | ||||||||||||||||||
First Lien Debt | $ | 338,616 | $ | 316,444 | 73.8 | % | $ | 351,858 | $ | 336,599 | 71.9 | % | ||||||||||||
Second Lien Debt | 36,758 | 28,885 | 6.7 | % | 50,814 | 41,254 | 8.8 | % | ||||||||||||||||
Subordinated Debt | 8,056 | 1,696 | 0.4 | % | 7,990 | 1,224 | 0.3 | % | ||||||||||||||||
Collateralized Loan Obligations | 7,881 | 6,786 | 1.6 | % | 9,103 | 8,968 | 1.9 | % | ||||||||||||||||
Joint Ventures | 64,153 | 52,288 | 12.2 | % | 71,415 | 59,287 | 12.7 | % | ||||||||||||||||
Equity | 29,493 | 22,879 | 5.3 | % | 31,280 | 20,533 | 4.4 | % | ||||||||||||||||
Asset Manager Affiliates(1) | 17,791 | — | — | 17,791 | — | — | ||||||||||||||||||
Derivatives | 31 | — | — | 31 | — | — | ||||||||||||||||||
Total | $ | 502,779 | $ | 428,978 | 100.0 | % | $ | 540,282 | $ | 467,865 | 100.0 | % |
(1) Represents the equity investment in the Asset Manager Affiliates.
Liquidity and Capital Resources
As of September 30, 2024, the Company had
As of September 30, 2024, and December 31, 2023, the fair value of investments and cash were as follows:
($ in thousands) | ||||||||
Security Type | September 30, 2024 | December 31, 2023 | ||||||
Cash and cash equivalents | $ | 13,736 | $ | 26,912 | ||||
Restricted Cash | 13,039 | 44,652 | ||||||
First Lien Debt | 316,444 | 336,599 | ||||||
Second Lien Debt | 28,885 | 41,254 | ||||||
Subordinated Debt | 1,696 | 1,224 | ||||||
Equity | 22,879 | 20,533 | ||||||
Collateralized Loan Obligations | 6,786 | 8,968 | ||||||
Asset Manager Affiliates | — | — | ||||||
Joint Ventures | 52,288 | 59,287 | ||||||
Derivatives | — | — | ||||||
Total | $ | 455,753 | $ | 539,429 |
As of September 30, 2024, the Company had unrestricted cash of
Interest Rate Risk
The Company’s investment income is affected by fluctuations in various interest rates, including SOFR and prime rates.
As of September 30, 2024, approximately
In periods of rising or lowering interest rates, the cost of the portion of debt associated with the
Generally, the Company would expect that an increase in the base rate index for floating rate investment assets would increase gross investment income and a decrease in the base rate index for such assets would decrease gross investment income (in either case, such increase/decrease may be limited by interest rate floors/minimums for certain investment assets).
Impact on net investment income from a change in interest rates at: | ||||||||||||
($ in thousands) | ||||||||||||
Increase in interest rate | $ | 1,732 | $ | 3,501 | $ | 5,270 | ||||||
Decrease in interest rate | $ | (1,712 | ) | $ | (3,425 | ) | $ | (5,072 | ) |
Conference Call and Webcast
We will hold a conference call on Tuesday, November 12, 2024, at 10:00 am Eastern Time to discuss our third quarter 2024 financial results. To access the call, stockholders, prospective stockholders and analysts should dial (646) 307-1963 approximately 10 minutes prior to the start of the conference call and use the conference ID 6715408.
A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company’s website www.portmanridge.com in the Investor Relations section under Events and Presentations. The webcast can also be accessed by clicking the following link: https://edge.media-server.com/mmc/p/ma5zjqpa. The online archive of the webcast will be available on the Company’s website shortly after the call.
About Portman Ridge Finance Corporation
Portman Ridge Finance Corporation (Nasdaq: PTMN) is a publicly traded, externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Portman Ridge’s middle market investment business originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. Portman Ridge’s investment activities are managed by its investment adviser, Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors L.P.
Portman Ridge’s filings with the Securities and Exchange Commission (the “SEC”), earnings releases, press releases and other financial, operational and governance information are available on the Company’s website at www.portmanridge.com.
About BC Partners Advisors L.P. and BC Partners Credit
BC Partners is a leading international investment firm in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades. Today, BC Partners executives operate across markets as an integrated team through the firm’s offices in North America and Europe. For more information, please visit https://www.bcpartners.com/.
BC Partners Credit was launched in February 2017 and has pursued a strategy focused on identifying attractive credit opportunities in any market environment and across sectors, leveraging the deal sourcing and infrastructure made available from BC Partners.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements. The matters discussed in this press release, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.
Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments and the future liquidity of the Company. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook”, “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.
Important assumptions include our ability to originate new investments, and achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation that such plans, estimates, expectations or objectives will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) uncertainty of the expected financial performance of the Company; (2) expected synergies and savings associated with merger transactions effectuated by the Company; (3) the ability of the Company and/or its adviser to implement its business strategy; (4) evolving legal, regulatory and tax regimes; (5) changes in general economic and/or industry specific conditions, including but not limited to the impact of inflation; (6) the impact of increased competition; (7) business prospects and the prospects of the Company’s portfolio companies; (8) contractual arrangements with third parties; (9) any future financings by the Company; (10) the ability of Sierra Crest Investment Management LLC to attract and retain highly talented professionals; (11) the Company’s ability to fund any unfunded commitments; (12) any future distributions by the Company; (13) changes in regional or national economic conditions and their impact on the industries in which we invest; and (14) other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the SEC. The forward-looking statements should be read in conjunction with the risks and uncertainties discussed in the Company’s filings with the SEC, including the Company’s most recent Form 10-K and other SEC filings. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the SEC.
Contacts:
Portman Ridge Finance Corporation
650 Madison Avenue, 3rd floor
New York, NY 10022
info@portmanridge.com
Brandon Satoren
Chief Financial Officer
Brandon.Satoren@bcpartners.com
(212) 891-2880
The Equity Group Inc.
Lena Cati
lcati@equityny.com
(212) 836-9611
Val Ferraro
vferraro@equityny.com
(212) 836-9633
PORTMAN RIDGE FINANCE CORPORATION | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands, except share and per share amounts) | ||||||||
September 30, 2024 | December 31, 2023 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Investments at fair value: | ||||||||
Non-controlled/non-affiliated investments (amortized cost of | $ | 357,459 | $ | 398,325 | ||||
Non-controlled affiliated investments (amortized cost of | 58,507 | 55,222 | ||||||
Controlled affiliated investments (amortized cost of | 13,012 | 14,318 | ||||||
Total Investments at fair value (amortized cost of | $ | 428,978 | $ | 467,865 | ||||
Cash and cash equivalents | 13,736 | 26,912 | ||||||
Restricted cash | 13,039 | 44,652 | ||||||
Interest receivable | 5,544 | 5,162 | ||||||
Receivable for unsettled trades | — | 573 | ||||||
Due from affiliates | 1,518 | 1,534 | ||||||
Other assets | 857 | 2,541 | ||||||
Total Assets | $ | 463,672 | $ | 549,239 | ||||
LIABILITIES | ||||||||
2018-2 Secured Notes (net of original issue discount of $— and | $ | — | $ | 124,971 | ||||
106,792 | 106,214 | |||||||
Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of deferred financing costs of | 158,126 | 91,225 | ||||||
Payable for unsettled trades | — | 520 | ||||||
Accounts payable, accrued expenses and other liabilities | 2,242 | 4,252 | ||||||
Accrued interest payable | 4,659 | 3,928 | ||||||
Due to affiliates | 1,029 | 458 | ||||||
Management and incentive fees payable | 2,842 | 4,153 | ||||||
Total Liabilities | $ | 275,690 | $ | 335,721 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||||
NET ASSETS | ||||||||
Common stock, par value | $ | 92 | $ | 94 | ||||
Capital in excess of par value | 714,933 | 717,835 | ||||||
Total distributable (loss) earnings | (527,043 | ) | (504,411 | ) | ||||
Total Net Assets | $ | 187,982 | $ | 213,518 | ||||
Total Liabilities and Net Assets | $ | 463,672 | $ | 549,239 | ||||
Net Asset Value Per Common Share | $ | 20.36 | $ | 22.76 |
PORTMAN RIDGE FINANCE CORPORATION | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Interest income: | ||||||||||||||||
Non-controlled/non-affiliated investments | $ | 11,357 | $ | 13,283 | $ | 35,891 | $ | 42,915 | ||||||||
Non-controlled affiliated investments | 356 | 631 | 763 | 2,106 | ||||||||||||
Total interest income | 11,713 | 13,914 | 36,654 | 45,021 | ||||||||||||
Payment-in-kind income: | ||||||||||||||||
Non-controlled/non-affiliated investments(1) | 1,343 | 2,308 | 5,255 | 4,694 | ||||||||||||
Non-controlled affiliated investments | 209 | 113 | 504 | 293 | ||||||||||||
Total payment-in-kind income | 1,552 | 2,421 | 5,759 | 4,987 | ||||||||||||
Dividend income: | ||||||||||||||||
Non-controlled affiliated investments | 1,669 | 1,429 | 5,122 | 4,677 | ||||||||||||
Controlled affiliated investments | — | 644 | — | 2,184 | ||||||||||||
Total dividend income | 1,669 | 2,073 | 5,122 | 6,861 | ||||||||||||
Fees and other income: | ||||||||||||||||
Non-controlled/non-affiliated investments | 243 | 166 | 505 | 1,644 | ||||||||||||
Non-controlled affiliated investments | — | — | — | 14 | ||||||||||||
Total fees and other income | 243 | 166 | 505 | 1,658 | ||||||||||||
Total investment income | 15,177 | 18,574 | 48,040 | 58,527 | ||||||||||||
EXPENSES | ||||||||||||||||
Management fees | 1,611 | 1,844 | 5,020 | 5,666 | ||||||||||||
Performance-based incentive fees | 1,230 | 1,519 | 3,838 | 5,007 | ||||||||||||
Interest and amortization of debt issuance costs | 5,120 | 6,343 | 16,210 | 19,047 | ||||||||||||
Professional fees | 283 | 502 | 1,357 | 1,473 | ||||||||||||
Administrative services expense | 596 | 617 | 1,313 | 1,947 | ||||||||||||
Directors' expense | 143 | 138 | 466 | 469 | ||||||||||||
Other general and administrative expenses | 392 | 445 | 1,331 | 1,308 | ||||||||||||
Total expenses | 9,375 | 11,408 | 29,535 | 34,917 | ||||||||||||
NET INVESTMENT INCOME | 5,802 | 7,166 | 18,505 | 23,610 | ||||||||||||
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS | ||||||||||||||||
Net realized gains (losses) from investment transactions: | ||||||||||||||||
Non-controlled/non-affiliated investments | (11,419 | ) | (2,361 | ) | (13,754 | ) | (10,713 | ) | ||||||||
Non-controlled affiliated investments | — | 725 | — | (399 | ) | |||||||||||
Controlled affiliated investments | — | — | (6,644 | ) | (80 | ) | ||||||||||
Net realized gain (loss) on investments | (11,419 | ) | (1,636 | ) | (20,398 | ) | (11,192 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Non-controlled/non-affiliated investments | 5,430 | 4,219 | (5,392 | ) | (4,316 | ) | ||||||||||
Non-controlled affiliated investments | (994 | ) | (1,117 | ) | (2,909 | ) | (662 | ) | ||||||||
Controlled affiliated investments | 75 | (1,394 | ) | 6,917 | (3,450 | ) | ||||||||||
Net change in unrealized gain (loss) on investments | 4,511 | 1,708 | (1,384 | ) | (8,428 | ) | ||||||||||
Tax (provision) benefit on realized and unrealized gains (losses) on investments | — | 264 | 537 | 671 | ||||||||||||
Net realized and unrealized appreciation (depreciation) on investments, net of taxes | (6,908 | ) | 336 | (21,245 | ) | (18,949 | ) | |||||||||
Net realized gain (loss) on extinguishment of debt | (403 | ) | (57 | ) | (655 | ) | (275 | ) | ||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,509 | ) | $ | 7,445 | $ | (3,395 | ) | $ | 4,386 | ||||||
Net Increase (Decrease) In Net Assets Resulting from Operations per Common Share: | ||||||||||||||||
Basic and Diluted: | $ | (0.16 | ) | $ | 0.78 | $ | (0.37 | ) | $ | 0.46 | ||||||
Net Investment Income Per Common Share: | ||||||||||||||||
Basic and Diluted: | $ | 0.63 | $ | 0.75 | $ | 1.99 | $ | 2.48 | ||||||||
Weighted Average Shares of Common Stock Outstanding — Basic and Diluted | 9,244,033 | 9,505,172 | 9,295,008 | 9,533,835 |
(1) During the three months ended September 30, 2024 and 2023, the Company received $— and
______________________________
¹ Core investment income represents reported total investment income as determined in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, less the impact of purchase discount accretion in connection with the Garrison Capital Inc. (“GARS”) and Harvest Capital Credit Corporation (“HCAP”) mergers. Portman Ridge believes presenting core investment income and the related per share amount is useful and appropriate supplemental disclosure for analyzing its financial performance due to the unique circumstance giving rise to the purchase accounting adjustment. However, core investment income is a non-U.S. GAAP measure and should not be considered as a replacement for total investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, core investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance.
² Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and cash equivalents, and restricted cash and (B) NAV. Portman Ridge believes presenting a net leverage ratio is useful and appropriate supplemental disclosure because it reflects the Company’s financial condition net of
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