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Rand Capital Reports 18% Increase in Total Investment Income for Second Quarter 2024

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Rand Capital (RAND) reported an 18% increase in total investment income to $2.1 million for Q2 2024, driven by a 35% rise in interest from portfolio companies. The company's net asset value (NAV) per share reached $26.56, up 11% from Q1 2024 and 13% from year-end 2023. Rand capitalized on market conditions, selling certain BDC holdings for a realized gain of $1.3 million. The company reduced its debt balance by $2.0 million during the quarter and an additional $2.3 million post-quarter.

Rand's portfolio included investments with a fair value of $87.1 million across 26 businesses, a 13% increase from December 31, 2023. The company declared a quarterly dividend of $0.29 per share for Q3 2024. Rand's strategy focuses on scaling through new investments and reinvesting in high-potential existing portfolio companies, aiming to strengthen its ability to increase cash dividends over the long term.

Rand Capital (RAND) ha registrato un aumento del 18% nel reddito totale da investimenti, raggiungendo i 2,1 milioni di dollari per il secondo trimestre del 2024, grazie a un incremento del 35% degli interessi provenienti dalle aziende del portafoglio. Il valore netto degli attivi (NAV) per azione della società ha raggiunto i 26,56 dollari, in aumento dell'11% rispetto al primo trimestre del 2024 e del 13% rispetto alla fine del 2023. Rand ha capitalizzato sulle condizioni di mercato, vendendo alcune partecipazioni BDC per una plusvalenza realizzata di 1,3 milioni di dollari. La società ha ridotto il suo saldo debitorio di 2,0 milioni di dollari durante il trimestre e ulteriori 2,3 milioni di dollari dopo il trimestre.

Il portafoglio di Rand comprendeva investimenti con un valore equo di 87,1 milioni di dollari in 26 imprese, un aumento del 13% rispetto al 31 dicembre 2023. La società ha dichiarato un dividendo trimestrale di 0,29 dollari per azione per il terzo trimestre del 2024. La strategia di Rand si concentra sull'espansione attraverso nuovi investimenti e sul reinvestimento in aziende ad alto potenziale già presenti nel portafoglio, con l'obiettivo di rafforzare la propria capacità di aumentare i dividendi in contante nel lungo periodo.

Rand Capital (RAND) reportó un aumento del 18% en los ingresos totales de inversiones, alcanzando los 2,1 millones de dólares en el segundo trimestre de 2024, impulsado por un incremento del 35% en los intereses de las empresas del portafolio. El valor neto de los activos (NAV) por acción de la compañía alcanzó los 26,56 dólares, un 11% más que en el primer trimestre de 2024 y un 13% más que a finales de 2023. Rand capitalizó las condiciones del mercado, vendiendo ciertas participaciones BDC por una ganancia realizada de 1,3 millones de dólares. La compañía redujo su saldo de deuda en 2,0 millones de dólares durante el trimestre y otros 2,3 millones de dólares después del trimestre.

El portafolio de Rand incluía inversiones con un valor razonable de 87,1 millones de dólares en 26 empresas, un aumento del 13% desde el 31 de diciembre de 2023. La compañía declaró un dividendo trimestral de 0,29 dólares por acción para el tercer trimestre de 2024. La estrategia de Rand se centra en escalar a través de nuevas inversiones y reinvertir en empresas del portafolio existentes con alto potencial, con el objetivo de fortalecer su capacidad de aumentar los dividendos en efectivo a largo plazo.

랜드 캐피탈 (RAND)은 2024년 2분기 총 투자 수익이 210만 달러로 18% 증가했다고 보고했으며, 이는 포트폴리오 회사로부터의 이자 수익이 35% 증가했기 때문입니다. 회사의 주당 순자산가치 (NAV)는 26.56달러에 달해 2024년 1분기 대비 11%, 2023년 연말 대비 13% 증가했습니다. 랜드는 시장 상황을 활용하여 특정 BDC 보유 자산을 매각해 130만 달러의 실현 이익을 올렸습니다. 회사는 분기 동안 채무 잔액을 200만 달러 줄였고, 분기 이후 추가로 230만 달러를 줄였습니다.

랜드의 포트폴리오는 26개 기업에 걸쳐 공정 가치가 8710만 달러인 투자로 구성되어 있으며, 이는 2023년 12월 31일 대비 13% 증가한 수치입니다. 회사는 2024년 3분기를 위한 주당 0.29달러의 분기 배당금을 선언했습니다. 랜드의 전략은 새로운 투자 확대와 기존 포트폴리오 기업에 대한 재투자를 통해 장기적으로 현금 배당금을 늘릴 수 있는 능력을 강화하는 데 중점을 두고 있습니다.

Rand Capital (RAND) a annoncé une augmentation de 18 % de ses revenus d'investissement total, atteignant 2,1 millions de dollars pour le 2ème trimestre 2024, grâce à une hausse de 35 % des intérêts provenant des entreprises du portefeuille. La valeur nette d'actif (NAV) par action de l'entreprise a atteint 26,56 dollars, en hausse de 11 % par rapport au 1er trimestre 2024 et de 13 % par rapport à la fin de l'année 2023. Rand a profité des conditions du marché, en vendant certaines participations BDC pour un gain réalisé de 1,3 million de dollars. L'entreprise a réduit son solde de dette de 2,0 millions de dollars durant le trimestre et de 2,3 millions de dollars après le trimestre.

Le portefeuille de Rand comprenait des investissements d'une valeur juste de 87,1 millions de dollars dans 26 entreprises, soit une augmentation de 13 % par rapport au 31 décembre 2023. L'entreprise a déclaré un dividende trimestriel de 0,29 dollar par action pour le 3ème trimestre 2024. La stratégie de Rand se concentre sur la croissance grâce à de nouveaux investissements et à la réinjection de fonds dans des entreprises du portefeuille existantes à fort potentiel, dans le but de renforcer sa capacité à augmenter les dividendes en espèces à long terme.

Rand Capital (RAND) berichtete von einem Anstieg des Gesamterträge aus Investitionen um 18% auf 2,1 Millionen Dollar für das 2. Quartal 2024, was durch einen Anstieg der Zinsen von Portfoliounternehmen um 35% bedingt war. Der Nettovermögenswert (NAV) pro Aktie des Unternehmens erreichte 26,56 Dollar, was einem Anstieg von 11% im Vergleich zum 1. Quartal 2024 und 13% im Vergleich zum Jahresende 2023 entspricht. Rand nutzte die Marktsituation, um bestimmte BDC-Beteiligungen mit einem realisierten Gewinn von 1,3 Millionen Dollar zu verkaufen. Im Laufe des Quartals reduzierte das Unternehmen seinen Schuldenstand um 2,0 Millionen Dollar und weitere 2,3 Millionen Dollar nach dem Quartal.

Das Portfolio von Rand umfasste Investitionen mit einem fairen Wert von 87,1 Millionen Dollar in 26 Unternehmen, was einem Anstieg von 13% seit dem 31. Dezember 2023 entspricht. Das Unternehmen erklärte eine vierteljährliche Dividende von 0,29 Dollar pro Aktie für das 3. Quartal 2024. Rand konzentriert sich in seiner Strategie auf das Wachstum durch neue Investitionen und das Reinvestieren in hochpotenzielle bestehende Portfoliounternehmen, um seine Fähigkeit zur langfristigen Erhöhung von Barausschüttungen zu stärken.

Positive
  • 18% increase in total investment income to $2.1 million for Q2 2024
  • 35% increase in interest from portfolio companies
  • NAV per share up 11% from Q1 2024 and 13% from year-end 2023
  • Realized gain of $1.3 million from sale of BDC holdings
  • Debt balance reduced by $2.0 million during Q2 and additional $2.3 million post-quarter
  • Portfolio fair value increased 13% to $87.1 million from December 31, 2023
  • Adjusted net investment income per share up 16% to $0.44
Negative
  • Net investment loss of $517,000 ($0.20 per share) compared to net investment income of $493,000 ($0.19 per share) in Q2 2023
  • Total expenses increased to $2.7 million from $1.3 million in Q2 2023
  • Interest expense increased to $393,000 from $259,000 in Q2 2023

Insights

Rand Capital's Q2 2024 results show strong financial performance with an 18% increase in total investment income to $2.1 million. The 35% growth in interest from portfolio companies is particularly impressive, indicating successful deployment of capital into income-generating assets. However, the net investment loss of $517,000 is concerning, primarily due to increased expenses, especially the $1.2 million rise in capital gains incentive fees.

The 13% increase in NAV to $26.56 per share since year-end 2023 is a positive indicator of portfolio value growth. The company's strategic moves, including the $1.3 million realized gain from BDC holdings sale and debt reduction, demonstrate prudent capital management. The pending SciAps acquisition could provide additional capital for future investments, potentially accelerating growth.

While the 13.8% annualized weighted average yield on debt investments is attractive, investors should monitor the impact of rising interest expenses on profitability. The consistent $0.29 quarterly dividend is positive for income-focused investors, but its sustainability will depend on improving net investment income.

Rand Capital's Q2 2024 results reveal a strategic shift towards income-generating debt instruments, aligning with their stated goal of cultivating a steady income stream. This pivot is evident in the 66% portfolio allocation to debt investments, up from previous quarters. The strategy appears to be yielding results, with the 18% increase in total investment income.

The company's focus on smaller, high-potential opportunities in the lower middle market is a differentiating factor. This approach could lead to higher returns but also carries increased risk. The planned reinvestment in existing portfolio companies suggests a balanced approach between new acquisitions and nurturing current investments.

The reduction in debt and the potential influx of capital from the SciAps sale position Rand well for future opportunities. However, the increase in expenses, particularly the capital gains incentive fees, warrants attention. Investors should monitor how effectively Rand deploys capital from recent exits and debt reductions to generate returns that outpace these rising costs.

Overall, Rand's strategy appears sound, but execution will be key in translating portfolio growth into consistent profitability and dividend sustainability.

  • Total investment income increased 18% to $2.1 million for the quarter compared with the second quarter last year driven by strong growth in interest income from an expanded portfolio of debt investments
  • Net asset value per share (“NAV”) was $26.56 at June 30, 2024, up 11% from March 31, 2024 and up 13% from year-end 2023
  • Capitalized on market conditions with the sale of certain BDC holdings that resulted in a realized gain of $1.3 million
  • Reduced debt balance $2.0 million during the quarter and repaid an additional $2.3 million subsequent to quarter-end
  • Portfolio company SciAps expected to be acquired in 2024 after definitive purchase agreement signed
  • Announced a quarterly dividend of $0.29 per share for third quarter 2024

BUFFALO, N.Y.--(BUSINESS WIRE)-- Rand Capital Corporation (Nasdaq: RAND) (“Rand” or the “Company”), a business development company providing alternative financing for lower middle market companies, announced its results for the second quarter ended June 30, 2024.

Daniel P. Penberthy, President and Chief Executive Officer of Rand, commented, "We are consistent and persistent in the execution of our strategy, driving strong growth in total investment income through prudent and strategic investments in income-generating debt instruments. During the quarter, our efforts to optimize the portfolio, including selective exits, generated capital that we advantageously deployed to improve our balance sheet. This positions us well for future growth opportunities. Additionally, we look forward to leveraging the capital expected from the pending sale of our portfolio investment company, SciAps, which we had previously announced and is expected to close later this year.

“Looking ahead, our plan is to continue scaling our business through new investments and also reinvesting in high-potential existing portfolio companies. Our goal is to focus on new debt investments in smaller opportunities, replicating our past successes in helping these companies grow. We believe this will cultivate a robust and steady income stream, strengthening our ability to increase cash dividends over the long term.”

Second Quarter Highlights (compared with the prior-year period unless otherwise noted)

  • Total investment income grew $321,000, or 18%, to $2.1 million, which reflected a 35% increase in interest from portfolio companies, partially offset by lower dividend and fee income.
  • Total expenses were $2.7 million compared with $1.3 million in last year’s second quarter. The change largely reflects a $1.2 million increase in capital gains incentive fees to the Company’s external investment adviser. The increase in total expenses also reflects $393,000 in interest expense from the senior revolving credit facility compared with $259,000 for the second quarter of 2023.
  • Adjusted expenses, which exclude capital gains incentive fees and is a non-GAAP financial measure, were $1.0 million compared with $816,000 in the second quarter of 2023. See the attached description of this non-GAAP financial measure and reconciliation table for adjusted expenses.
  • Net investment loss was $517,000, or $0.20 per share, compared with net investment income of $493,000, or $0.19 per share, in the second quarter of 2023. Adjusted net investment income per share, a non-GAAP financial measure, which excludes the capital gains incentive fee accrual expense, was $0.44 per share, up 16% from $0.38 per share in last year’s second quarter. See the attached description of this non-GAAP financial measure and reconciliation table for adjusted net investment income per share.

Portfolio and Investment Activity

As of June 30, 2024, Rand’s portfolio included investments with a fair value of $87.1 million across 26 portfolio businesses. This was an increase of $9.9 million, or 13%, from December 31, 2023, and reflected new and follow-on investments and valuation adjustments in multiple portfolio companies, partially offset by stock sales and other portfolio company loan repayments. At June 30, 2024, Rand’s portfolio was comprised of approximately 66% in debt investments, 32% in equity investments in private companies, and 2% in publicly traded equities of other BDCs. The annualized weighted average yield of debt investments, which includes PIK interest, was 13.8% at June 30, 2024, compared with 13.6% at the end of 2023.

Second quarter 2024:

  • Funded a follow-on equity investment of $108,000 in Food Service Supply Holdco LLC (FSS). Rand’s total debt and equity investment in FSS had a fair value of $7.5 million at quarter-end.
  • Sold shares in three publicly traded BDCs for total proceeds of $3.3 million, which included a realized gain of $1.3 million.
  • Received $740,000 principal loan repayment from Pressure Pro, Inc.
  • Realized a gain of $397,000 from a partial asset sale of a Tilson affiliated company.
  • At quarter-end, Rand’s total debt and equity investment in SciAps had a fair value of $10.8 million.
  • Exited remaining equity investment in KNOA Software.

Liquidity and Capital Resources

Cash was $2.3 million at June 30, 2024. The Company also held shares valued at approximately $1.3 million in other publicly traded BDCs, which are available for future operational and liquidity needs.

During the quarter, Rand reduced its outstanding borrowings by $2.0 million, leaving a balance of $17.2 million on its existing $25.0 million senior secured revolving credit facility at June 30, 2024. The outstanding borrowings carried an interest rate of 8.8% at quarter-end. Subsequent to quarter-end, Rand repaid an additional $2.3 million on its outstanding borrowings.

The Company did not repurchase any outstanding common stock during the second quarter of 2024.

Dividends

On May 8, 2024, Rand declared its regular quarterly cash dividend distribution of $0.29 per share, which was paid during the second quarter to shareholders of record as of May 31, 2024.

On July 31, 2024, Rand declared its regular quarterly cash dividend distribution of $0.29 per share. The cash dividend will be distributed on or about September 13, 2024, to shareholders of record as of August 30, 2024.

Webcast and Conference Call

Rand will host a conference call and webcast on Tuesday August 6, 2024, at 1:30 p.m. Eastern Time, to review its financial results. The review will be accompanied by a slide presentation, which will be available on Rand’s website at www.randcapital.com in the “Investor Relations” section. Rand’s conference call can be accessed by calling (201) 689-8263. Alternatively, the webcast can be monitored on Rand’s website at www.randcapital.com under “Investor Relations” where the replay will also be available.

A telephonic replay will be available from 5:30 p.m. ET on the day of the call through Tuesday, August 20, 2024. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13747031. A transcript of the call will also be posted once available.

ABOUT RAND CAPITAL

Rand Capital (Nasdaq: RAND) is an externally managed business development company (BDC). The Company’s investment objective is to maximize total return to its shareholders with current income and capital appreciation by focusing its debt and related equity investments in privately-held, lower middle market companies with committed and experienced managements in a broad variety of industries. Rand invests in businesses that have sustainable, differentiated and market-proven products, revenue of more than $10 million and EBITDA in excess of $1.5 million. The Company’s investment activities are managed by its external investment adviser, Rand Capital Management, LLC. Additional information can be found at the Company’s website where it regularly posts information: www.randcapital.com.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than historical facts, including but not limited to statements regarding the strategy of the Company and its outlook; statements regarding pending sale of portfolio company SciAps and the timing for the expected closing of such transaction; statements regarding the implementation of the Company’s strategy and the growth of its dividend; and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. 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. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) evolving legal, regulatory and tax regimes; (2) changes in general economic and/or industry specific conditions; and (3) other risk factors as detailed from time to time in Rand’s reports filed with the Securities and Exchange Commission (“SEC”), including Rand’s annual report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q, and other documents filed with the SEC. Consequently, such forward-looking statements should be regarded as Rand’s current plans, estimates and beliefs. Except as required by applicable law, Rand assumes no obligation to update the forward-looking information contained in this release.

FINANCIAL TABLES FOLLOW

Rand Capital Corporation and Subsidiaries

Consolidated Statements of Financial Position

 

 

 

June 30,
2024
(Unaudited)

 

 

December 31,
2023

 

ASSETS

 

 

 

 

 

 

Investments at fair value:

 

 

 

 

 

 

Control investments (cost of $5,721,856 and $5,272,770, respectively)

 

$

4,598,046

 

 

$

4,148,960

 

Affiliate investments (cost of $45,250,676 and $45,720,974, respectively)

 

 

61,779,019

 

 

 

53,499,372

 

Non-Control/Non-Affiliate investments (cost of $22,449,599 and $17,371,862, respectively)

 

 

20,693,902

 

 

 

19,477,380

 

Total investments, at fair value (cost of $73,422,131 and $68,365,606, respectively)

 

 

87,070,967

 

 

 

77,125,712

 

Cash

 

 

2,293,226

 

 

 

3,295,321

 

Interest receivable

 

 

516,617

 

 

 

244,600

 

Prepaid income taxes

 

 

149,863

 

 

 

127,869

 

Deferred tax asset, net

 

 

174,053

 

 

 

39,179

 

Other assets

 

 

584,343

 

 

 

189,301

 

Total assets

 

$

90,789,069

 

 

$

81,021,982

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS)

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Due to investment adviser

 

$

322,672

 

 

$

979,297

 

Accounts payable and accrued expenses

 

 

108,358

 

 

 

145,516

 

Line of credit

 

 

17,200,000

 

 

 

16,250,000

 

Capital gains incentive fees

 

 

4,033,000

 

 

 

2,279,700

 

Deferred revenue

 

 

566,423

 

 

 

552,256

 

Total liabilities

 

 

22,230,453

 

 

 

20,206,769

 

Stockholders’ equity (net assets):

 

 

 

 

 

 

Common stock, $0.10 par; shares authorized 100,000,000; shares issued: 2,648,916; shares outstanding: 2,581,021 at 6/30/24 and 12/31/23

 

 

264,892

 

 

 

264,892

 

Capital in excess of par value

 

 

55,801,170

 

 

 

55,801,170

 

Treasury stock, at cost: 67,895 shares at 6/30/24 and 12/31/23

 

 

(1,566,605

)

 

 

(1,566,605

)

Total distributable earnings

 

 

14,059,159

 

 

 

6,315,756

 

Total stockholders’ equity (net assets) (per share – 6/30/24: $26.56; 12/31/23: $23.56)

 

 

68,558,616

 

 

 

60,815,213

 

Total liabilities and stockholders’ equity (net assets)

 

$

90,789,069

 

 

$

81,021,982

 

Rand Capital Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

 

 

 

Three
months
ended
June 30,
2024

 

 

Three
months
ended
June 30,
2023

 

 

Six months
ended
June 30,
2024

 

 

Six months
ended
June 30,
2023

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest from portfolio companies:

 

 

 

 

 

 

 

 

 

 

 

 

Control investments

 

$

198,885

 

 

$

179,922

 

 

$

386,368

 

 

$

330,838

 

Affiliate investments

 

 

1,192,116

 

 

 

941,201

 

 

 

2,358,201

 

 

 

1,729,022

 

Non-Control/Non-Affiliate Investments

 

 

604,226

 

 

 

352,417

 

 

 

1,064,306

 

 

 

710,583

 

Total interest from portfolio companies

 

 

1,995,227

 

 

 

1,473,540

 

 

 

3,808,875

 

 

 

2,770,443

 

Interest from other investments:

 

 

 

 

 

 

 

 

 

 

 

 

Non-Control/Non-Affiliate Investments

 

 

144

 

 

 

104

 

 

 

2,058

 

 

 

236

 

Total interest from other investments

 

 

144

 

 

 

104

 

 

 

2,058

 

 

 

236

 

Dividend and other investment income:

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate investments

 

 

13,125

 

 

 

59,677

 

 

 

26,250

 

 

 

406,825

 

Non-Control/Non-Affiliate Investments

 

 

60,050

 

 

 

132,920

 

 

 

198,760

 

 

 

260,515

 

Total dividend and other investment income

 

 

73,175

 

 

 

192,597

 

 

 

225,010

 

 

 

667,340

 

Fee income:

 

 

 

 

 

 

 

 

 

 

 

 

Control investments

 

 

4,516

 

 

 

4,311

 

 

 

9,032

 

 

 

8,211

 

Affiliate investments

 

 

54,815

 

 

 

138,902

 

 

 

128,535

 

 

 

206,744

 

Non-Control/Non-Affiliate Investments

 

 

8,272

 

 

 

5,978

 

 

 

29,858

 

 

 

13,956

 

Total fee income

 

 

67,603

 

 

 

149,191

 

 

 

167,425

 

 

 

228,911

 

Total investment income

 

 

2,136,149

 

 

 

1,815,432

 

 

 

4,203,368

 

 

 

3,666,930

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Base management fee

 

 

322,672

 

 

 

255,867

 

 

 

625,267

 

 

 

501,260

 

Capital gains incentive fees

 

 

1,641,000

 

 

 

491,000

 

 

 

1,753,300

 

 

 

782,000

 

Interest expense

 

 

393,172

 

 

 

258,912

 

 

 

783,192

 

 

 

417,312

 

Professional fees

 

 

91,460

 

 

 

100,307

 

 

 

323,767

 

 

 

271,282

 

Stockholders and office operating

 

 

82,667

 

 

 

85,080

 

 

 

151,695

 

 

 

149,384

 

Directors' fees

 

 

66,550

 

 

 

67,391

 

 

 

130,400

 

 

 

131,241

 

Administrative fees

 

 

40,000

 

 

 

37,250

 

 

 

78,167

 

 

 

74,500

 

Insurance

 

 

10,380

 

 

 

10,380

 

 

 

23,424

 

 

 

23,340

 

Corporate development

 

 

4,881

 

 

 

554

 

 

 

10,426

 

 

 

4,267

 

Total expenses

 

 

2,652,782

 

 

 

1,306,741

 

 

 

3,879,638

 

 

 

2,354,586

 

Net investment (loss) income before income taxes:

 

 

(516,633

)

 

 

508,691

 

 

 

323,730

 

 

 

1,312,344

 

Income taxes, including excise tax expense

 

 

562

 

 

 

16,061

 

 

 

1,340

 

 

 

104,798

 

Net investment (loss) income

 

 

(517,195

)

 

 

492,630

 

 

 

322,390

 

 

 

1,207,546

 

Net realized gain on sales and dispositions of investments:

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate investments

 

 

(831,891

)

 

 

2,537,765

 

 

 

(831,891

)

 

 

2,596,094

 

Non-Control/Non-Affiliate Investments

 

 

1,259,999

 

 

 

1,280,482

 

 

 

4,710,091

 

 

 

1,275,541

 

Net realized gain on sales and dispositions of investments, before income taxes

 

 

428,108

 

 

 

3,818,247

 

 

 

3,878,200

 

 

 

3,871,635

 

Income tax expense

 

 

 

 

 

338,158

 

 

 

 

 

 

338,158

 

Net realized gain on sales and dispositions of investments

 

 

428,108

 

 

 

3,480,089

 

 

 

3,878,200

 

 

 

3,533,477

 

Net change in unrealized appreciation/depreciation on investments:

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate investments

 

 

8,849,945

 

 

 

(886,698

)

 

 

8,749,945

 

 

 

(886,698

)

Non-Control/Non-Affiliate Investments

 

 

(1,070,919

)

 

 

(480,572

)

 

 

(3,861,215

)

 

 

921,401

 

Change in unrealized appreciation/depreciation before income taxes

 

 

7,779,026

 

 

 

(1,367,270

)

 

 

4,888,730

 

 

 

34,703

 

Deferred income tax benefit

 

 

(47,834

)

 

 

(66,441

)

 

 

(47,834

)

 

 

(66,441

)

Net change in unrealized appreciation/depreciation on investments

 

 

7,826,860

 

 

 

(1,300,829

)

 

 

4,936,564

 

 

 

101,144

 

Net realized and unrealized gain on investments

 

 

8,254,968

 

 

 

2,179,260

 

 

 

8,814,764

 

 

 

3,634,621

 

Net increase in net assets from operations

 

$

7,737,773

 

 

$

2,671,890

 

 

$

9,137,154

 

 

$

4,842,167

 

Weighted average shares outstanding

 

 

2,581,021

 

 

 

2,581,021

 

 

 

2,581,021

 

 

 

2,581,021

 

Basic and diluted net increase in net assets from operations per share

 

$

3.00

 

 

$

1.04

 

 

$

3.54

 

 

$

1.88

 

Rand Capital Corporation and Subsidiaries

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

 

 

Three
months
ended
June 30,
2024

 

 

Three
months
ended
June 30,
2023

 

 

Six months
ended
June 30,
2024

 

 

Six months
ended
June 30,
2023

 

Net assets at beginning of period

 

$

61,569,339

 

 

$

59,375,393

 

 

$

60,815,213

 

 

$

57,721,320

 

Net investment (loss) income

 

 

(517,195

)

 

 

492,630

 

 

 

322,390

 

 

 

1,207,546

 

Net realized gain on sales and dispositions of investments

 

 

428,108

 

 

 

3,480,089

 

 

 

3,878,200

 

 

 

3,533,477

 

Net change in unrealized appreciation/depreciation on investments

 

 

7,826,860

 

 

 

(1,300,829

)

 

 

4,936,564

 

 

 

101,144

 

Net increase in net assets from operations

 

 

7,737,773

 

 

 

2,671,890

 

 

 

9,137,154

 

 

 

4,842,167

 

Declaration of dividend

 

 

(748,496

)

 

 

(645,255

)

 

 

(1,393,751

)

 

 

(1,161,459

)

Net assets at end of period

 

$

68,558,616

 

 

$

61,402,028

 

 

$

68,558,616

 

 

$

61,402,028

 

Rand Capital Corporation and Subsidiaries
Reconciliation of GAAP Total Expense to Non-GAAP Adjusted Expenses
(Unaudited)

In addition to reporting total expenses, which is a U.S. generally accepted accounting principle (“GAAP”) financial measure, Rand presents adjusted expenses, which is a non-GAAP financial measure. Adjusted expenses is defined as GAAP total expenses removing the effect of any expenses for capital gains incentive fees accrual. GAAP total expenses is the most directly comparable GAAP financial measure. Rand believes that adjusted expenses provides useful information to investors regarding financial performance because it is a method the Company uses to measure its financial and business trends related to its results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

 

Three
months
ended
June 30, 2024

Three
months
ended
June 30, 2023

Six months
ended
June 30,
2024

Six months
ended
June 30,
2023

 

 

 

 

 

Total expenses

$

2,652,782

$

1,306,741

$

3,879,638

$

2,354,586

Exclude expenses for capital gains incentive fees

 

1,641,000

 

491,000

 

1,753,300

 

782,000

Adjusted total expenses

$

1,011,782

$

815,741

$

2,126,338

$

1,572,586

Reconciliation of GAAP Net Investment (Loss) Income per Share to
Adjusted Net Investment Income per Share
(Unaudited)

In addition to reporting Net Investment (Loss) Income per Share, which is a GAAP financial measure, the Company presents Adjusted Net Investment Income per Share, which is a non-GAAP financial measure. Adjusted Net Investment Income per Share is defined as GAAP Net Investment (Loss) Income per Share removing the effect of any expenses for capital gains incentive fees. GAAP Net Investment (Loss) Income per Share is the most directly comparable GAAP financial measure. Rand believes that Adjusted Net Investment Income per Share provides useful information to investors regarding financial performance because it is a method the Company uses to measure its financial and business trends related to its results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

 

Three months
ended
June 30, 2024

Three months
ended
June 30, 2023

Six months
ended
June 30, 2024

Six months
ended
June 30, 2023

 

 

 

 

 

Net investment (loss) income per share

$

(0.20)

$

0.19

$

0.12

$

0.47

Exclude expenses for capital gains incentive fees per share

 

0.64

 

0.19

 

0.68

 

0.30

Adjusted net investment income per share

$

0.44

$

0.38

$

0.80

$

0.77

 

Company:

Daniel P. Penberthy

President and CEO

716.853.0802

dpenberthy@randcapital.com

Investors:

Deborah K. Pawlowski / Craig P. Mychajluk

Kei Advisors LLC

716-843-3908 / 716-843-3832

dpawlowski@keiadvisors.com / cmychajluk@keiadvisors.com

Source: Rand Capital Corporation

FAQ

What was Rand Capital's (RAND) total investment income for Q2 2024?

Rand Capital's total investment income for Q2 2024 was $2.1 million, an 18% increase compared to the same quarter last year.

How much did Rand Capital (RAND) reduce its debt balance in Q2 2024?

Rand Capital reduced its debt balance by $2.0 million during Q2 2024 and an additional $2.3 million subsequent to the quarter-end.

What is the quarterly dividend announced by Rand Capital (RAND) for Q3 2024?

Rand Capital announced a quarterly dividend of $0.29 per share for the third quarter of 2024.

What was Rand Capital's (RAND) net asset value per share as of June 30, 2024?

Rand Capital's net asset value per share was $26.56 as of June 30, 2024, up 11% from March 31, 2024 and 13% from year-end 2023.

How much realized gain did Rand Capital (RAND) report from the sale of BDC holdings in Q2 2024?

Rand Capital reported a realized gain of $1.3 million from the sale of certain BDC holdings in Q2 2024.

Rand Capital Corp

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