Rand Capital Reports 27% Increase in Total Investment Income for Third Quarter 2024, Supported by Strategic Debt Portfolio Growth
Rand Capital (NASDAQ: RAND) reported strong Q3 2024 results with total investment income increasing 27% to $2.2 million, driven by debt portfolio growth. Net asset value per share rose to $27.29, up 3% from June 30 and 16% from year-end 2023. The company received $13.1 million from the sale of SciAps, using proceeds to reduce debt. The portfolio, valued at $75.0 million across 22 businesses, is now 74% debt investments with a 13.8% weighted average yield. Rand paid a quarterly dividend of $0.29 per share and maintains strong liquidity with over $24 million available.
Rand Capital (NASDAQ: RAND) ha riportato risultati solidi per il terzo trimestre del 2024, con un incremento del 27% nel reddito da investimenti totali, che raggiunge 2,2 milioni di dollari, sostenuto dalla crescita del portafoglio debitorio. Il valore netto degli attivi per azione è aumentato a 27,29 dollari, con un incremento del 3% rispetto al 30 giugno e del 16% rispetto alla fine del 2023. L'azienda ha ricevuto 13,1 milioni di dollari dalla vendita di SciAps, utilizzando il ricavato per ridurre il debito. Il portafoglio, valutato 75,0 milioni di dollari su 22 aziende, è ora composto per il 74% da investimenti in debito con un rendimento medio ponderato del 13,8%. Rand ha pagato un dividendo trimestrale di 0,29 dollari per azione e mantiene una forte liquidità con oltre 24 milioni di dollari disponibili.
Rand Capital (NASDAQ: RAND) reportó resultados sólidos para el tercer trimestre de 2024, con un aumento del 27% en los ingresos totales por inversiones, alcanzando 2.2 millones de dólares, impulsado por el crecimiento del portafolio de deuda. El valor neto de los activos por acción subió a 27.29 dólares, un aumento del 3% desde el 30 de junio y del 16% desde finales de 2023. La compañía recibió 13.1 millones de dólares por la venta de SciAps, usando los ingresos para reducir la deuda. El portafolio, valorado en 75.0 millones de dólares en 22 empresas, ahora consiste en un 74% de inversiones en deuda con un rendimiento promedio ponderado del 13.8%. Rand pagó un dividendo trimestral de 0.29 dólares por acción y mantiene una sólida liquidez con más de 24 millones de dólares disponibles.
랜드 캐피탈 (NASDAQ: RAND)는 2024년 3분기 실적을 보고하며, 총 투자 수익이 27% 증가하여 220만 달러에 달했으며, 이는 부채 포트폴리오의 성장에 기인합니다. 주당 순 자산 가치는 27.29 달러로, 6월 30일 대비 3% 상승하고 2023년 연말 대비 16% 증가했습니다. 이 회사는 SciAps의 매각으로 1310만 달러를 수령하였고, 이 수익금으로 부채를 줄였습니다. 22개 기업에 걸쳐 7500만 달러로 평가된 포트폴리오는 이제 74%가 부채 투자로 구성되며, 가중 평균 수익률은 13.8%입니다. 랜드는 주당 0.29 달러의 분기 배당금을 지급하였으며, 2400만 달러 이상을 보유한 강력한 유동성을 유지하고 있습니다.
Rand Capital (NASDAQ: RAND) a rapporté des résultats solides pour le troisième trimestre 2024, avec un revenu total d'investissement en augmentation de 27 % pour atteindre 2,2 millions de dollars, soutenu par la croissance du portefeuille de dettes. La valeur nette d'actif par action a augmenté à 27,29 dollars, soit une hausse de 3 % par rapport au 30 juin et de 16 % par rapport à la fin de l'année 2023. La société a reçu 13,1 millions de dollars suite à la vente de SciAps, utilisant les produits pour réduire la dette. Le portefeuille, évalué à 75,0 millions de dollars à travers 22 entreprises, se compose maintenant de 74 % d'investissements en dettes avec un rendement moyen pondéré de 13,8 %. Rand a versé un dividende trimestriel de 0,29 dollar par action et maintient une forte liquidité avec plus de 24 millions de dollars disponibles.
Rand Capital (NASDAQ: RAND) hat starke Ergebnisse für das dritte Quartal 2024 veröffentlicht, mit einem Anstieg der gesamten Investitionseinkünfte um 27% auf 2,2 Millionen Dollar, was auf das Wachstum des Schuldenportfolios zurückzuführen ist. Der Nettoinventarwert pro Aktie stieg auf 27,29 Dollar, was einem Anstieg von 3% seit dem 30. Juni und von 16% im Vergleich zum Jahresende 2023 entspricht. Das Unternehmen erhielt 13,1 Millionen Dollar aus dem Verkauf von SciAps und verwendete die Einnahmen zur Schuldenreduzierung. Das Portfolio, das auf 75,0 Millionen Dollar über 22 Unternehmen geschätzt wird, besteht nun zu 74% aus Schuldverschreibungen mit einer gewichteten durchschnittlichen Rendite von 13,8%. Rand zahlte eine vierteljährliche Dividende von 0,29 Dollar pro Aktie und hat eine starke Liquidität mit über 24 Millionen Dollar zur Verfügung.
- Total investment income grew 27% YoY to $2.2 million
- NAV increased 16% from year-end 2023 to $27.29
- Realized gain of $7.7 million from SciAps sale
- Debt reduction of $13.3 million improving balance sheet
- Portfolio yield increased to 13.8% from 13.6% at end of 2023
- Total portfolio value decreased 3% from December 2023
- Total expenses increased from $810,000 to $1.3 million YoY
Insights
The Q3 results demonstrate strong financial performance with
The improved net investment income of
-
Total investment income rose
27% to for the quarter compared with the third quarter last year, driven by strong growth in interest income from an expanded portfolio of debt investments$2.2 million -
Net asset value per share (“NAV”) increased to
, up$27.29 3% from June 30, 2024 and16% higher than year-end 2023 -
received from the sale of portfolio company SciAps, Inc. with proceeds used to reduce debt balance$13.1 million -
Paid a quarterly dividend of
per share for third quarter 2024$0.29
"Our third quarter results reflect the strength of our investment strategy, highlighted by a
Third Quarter Highlights (compared with the prior-year period unless otherwise noted)
-
Total investment income grew
, or$477,000 27% , to , which reflected strong growth of interest from portfolio companies given the origination of five new debt instruments over the last year. Also contributing to the total investment income growth was an increase in fee income.$2.2 million -
Total expenses were
compared with$1.3 million in last year’s third quarter. The change largely reflects a$810,000 increase in capital gains incentive fee expense and a$354,000 increase in the income based incentive fee expense payable to the Company’s external investment advisor. The Company had lower interest expense of$178,000 given the debt pay down during the quarter.$46,000 -
Adjusted expenses, which exclude capital gains incentive fees and is a non-GAAP financial measure, were
compared with$1.0 million in the third quarter of 2023. See the attached description of this non-GAAP financial measure and reconciliation table for adjusted expenses.$851,000 -
Net investment income was
, or$887,000 per share, compared with$0.34 , or$799,000 per share, in the third quarter of 2023. Adjusted net investment income per share, a non-GAAP financial measure, which excludes the capital gains incentive fee accrual expense, was$0.31 per share, up$0.46 59% from per share in last year’s third quarter. See the attached description of this non-GAAP financial measure and reconciliation table for adjusted net investment income per share.$0.29
Portfolio and Investment Activity
As of September 30, 2024, Rand’s portfolio included investments with a fair value of
Third quarter 2024:
-
Funded a follow-on debt investment of
in ITA Acquisition, LLC. Rand’s total debt and equity investment in ITA Acquisition, LLC had a fair value of$125,000 at quarter-end.$4.9 million -
Received
from the previously announced sale of portfolio company SciAps, Inc., which included a realized gain of$13.1 million . The proceeds from the sale payable at closing to Rand consisted of$7.7 million in debt repayment,$2.1 million in interest income and loan-related fees, and$165,000 in equity return. These totals reflect$10.8 million held in transaction-related escrows.$244,000 -
Sold remaining shares in two publicly traded BDCs for total proceeds of
, which netted a realized gain of$1.3 million .$249,000 - Exited investment in Mezmeriz, realizing a tax loss on an equity investment having a fair value of zero.
Liquidity and Capital Resources
Cash was
The Company did not repurchase any outstanding common stock during the third quarter of 2024.
Dividends
On July 31, 2024, Rand declared its regular quarterly cash dividend distribution of
Webcast and Conference Call
Rand will host a conference call and webcast on Wednesday November 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 “Investors” 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 Wednesday, November 20, 2024. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13749407. 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 primarily invests in businesses that have sustainable, differentiated and market-proven products, revenue of more than
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 the implementation of the Company’s strategy and the growth of its dividend and the timing for the Company’s fourth quarter dividend announcement; 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 |
||||||||
|
September 30,
|
December 31,
|
||||||
ASSETS |
||||||||
Investments at fair value: |
||||||||
Control investments (cost of |
$ |
4,919,969 |
|
$ |
4,148,960 |
|
||
Affiliate investments (cost of respectively) |
|
50,859,581 |
|
|
53,499,372 |
|
||
Non-Control/Non-Affiliate investments (cost of
|
|
19,256,017 |
|
|
19,477,380 |
|
||
Total investments, at fair value (cost of respectively) |
|
75,035,567 |
|
|
77,125,712 |
|
||
Cash |
|
3,352,734 |
|
|
3,295,321 |
|
||
Interest receivable |
|
408,247 |
|
|
244,600 |
|
||
Prepaid income taxes |
|
185,602 |
|
|
127,869 |
|
||
Deferred tax asset, net |
|
367,765 |
|
|
39,179 |
|
||
Other assets |
|
448,204 |
|
|
189,301 |
|
||
Total assets |
$ |
79,798,119 |
|
$ |
81,021,982 |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY (NET ASSETS) |
||||||||
Liabilities: |
||||||||
Due to investment adviser |
$ |
487,483 |
|
$ |
979,297 |
|
||
Accounts payable and accrued expenses |
|
104,381 |
|
|
145,516 |
|
||
Line of credit |
|
3,900,000 |
|
|
16,250,000 |
|
||
Capital gains incentive fees |
|
4,346,000 |
|
|
2,279,700 |
|
||
Deferred revenue |
|
513,619 |
|
|
552,256 |
|
||
Total liabilities |
|
9,351,483 |
|
|
20,206,769 |
|
||
Stockholders’ equity (net assets): |
||||||||
Common stock, issued: 2,648,916; shares outstanding: 2,581,021 at 9/30/24 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 9/30/24 and 12/31/23 |
|
(1,566,605 |
) |
|
(1,566,605 |
) |
||
Total distributable earnings |
|
15,947,179 |
|
|
6,315,756 |
|
||
Total stockholders’ equity (net assets) (per share – 9/30/24: |
|
70,446,636 |
|
|
60,815,213 |
|
||
Total liabilities and stockholders’ equity (net assets) |
$ |
79,798,119 |
|
$ |
81,021,982 |
|
Rand Capital Corporation and Subsidiaries |
||||||||||||||||
Consolidated Statements of Operations |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Three months ended September 30, 2024 |
Three months ended September 30, 2023 |
Nine months ended September 30, 2024 |
Nine months ended September 30, 2023 |
|||||||||||||
Investment income: | ||||||||||||||||
Interest from portfolio companies: | ||||||||||||||||
Control investments | $ |
164,167 |
|
$ |
175,962 |
|
$ |
550,535 |
|
$ |
506,800 |
|
||||
Affiliate investments |
|
1,164,525 |
|
|
1,002,553 |
|
|
3,522,726 |
|
|
2,731,575 |
|
||||
Non-Control/Non-Affiliate investments |
|
616,903 |
|
|
357,162 |
|
|
1,681,209 |
|
|
1,067,745 |
|
||||
Total interest from portfolio companies |
|
1,945,595 |
|
|
1,535,677 |
|
|
5,754,470 |
|
|
4,306,120 |
|
||||
Interest from other investments: | ||||||||||||||||
Non-Control/Non-Affiliate investments |
|
113 |
|
|
456 |
|
|
2,171 |
|
|
692 |
|
||||
Total interest from other investments |
|
113 |
|
|
456 |
|
|
2,171 |
|
|
692 |
|
||||
Dividend and other investment income: | ||||||||||||||||
Affiliate investments |
|
13,125 |
|
|
13,126 |
|
|
39,375 |
|
|
419,951 |
|
||||
Non-Control/Non-Affiliate investments |
|
44,000 |
|
|
141,290 |
|
|
242,760 |
|
|
401,805 |
|
||||
Total dividend and other investment income |
|
57,125 |
|
|
154,416 |
|
|
282,135 |
|
|
821,756 |
|
||||
Fee income: | ||||||||||||||||
Control investments |
|
4,515 |
|
|
4,515 |
|
|
13,547 |
|
|
12,726 |
|
||||
Affiliate investments |
|
202,834 |
|
|
40,072 |
|
|
331,369 |
|
|
246,816 |
|
||||
Non-Control/Non-Affiliate investments |
|
8,272 |
|
|
5,978 |
|
|
38,130 |
|
|
19,934 |
|
||||
Total fee income |
|
215,621 |
|
|
50,565 |
|
|
383,046 |
|
|
279,476 |
|
||||
Total investment income |
|
2,218,454 |
|
|
1,741,114 |
|
|
6,421,822 |
|
|
5,408,044 |
|
||||
Expenses: | ||||||||||||||||
Base management fee |
|
309,265 |
|
|
268,609 |
|
|
934,532 |
|
|
769,869 |
|
||||
Income based incentive fees |
|
178,218 |
|
|
— |
|
|
178,218 |
|
|
— |
|
||||
Capital gains incentive fees |
|
313,000 |
|
|
(41,300 |
) |
|
2,066,300 |
|
|
740,700 |
|
||||
Interest expense |
|
245,006 |
|
|
290,522 |
|
|
1,028,198 |
|
|
707,834 |
|
||||
Professional fees |
|
113,168 |
|
|
120,828 |
|
|
436,935 |
|
|
392,110 |
|
||||
Stockholders and office operating |
|
57,869 |
|
|
57,097 |
|
|
209,564 |
|
|
206,481 |
|
||||
Directors' fees |
|
66,550 |
|
|
66,550 |
|
|
196,950 |
|
|
197,791 |
|
||||
Administrative fees |
|
40,000 |
|
|
37,250 |
|
|
118,167 |
|
|
111,750 |
|
||||
Insurance |
|
10,467 |
|
|
10,380 |
|
|
33,891 |
|
|
33,720 |
|
||||
Corporate development |
|
387 |
|
|
— |
|
|
10,813 |
|
|
4,267 |
|
||||
Total expenses |
|
1,333,930 |
|
|
809,936 |
|
|
5,213,568 |
|
|
3,164,522 |
|
||||
Net investment income before income taxes: |
|
884,524 |
|
|
931,178 |
|
|
1,208,254 |
|
|
2,243,522 |
|
||||
Income tax (benefit) expense, including excise tax expense |
|
(2,511 |
) |
|
132,595 |
|
|
(1,171 |
) |
|
237,393 |
|
||||
Net investment income |
|
887,035 |
|
|
798,583 |
|
|
1,209,425 |
|
|
2,006,129 |
|
||||
Net realized gain (loss) on sales and dispositions of investments: | ||||||||||||||||
Affiliate investments |
|
6,980,728 |
|
|
— |
|
|
6,148,837 |
|
|
2,596,094 |
|
||||
Non-Control/Non-Affiliate investments |
|
249,354 |
|
|
(2,802,731 |
) |
|
4,959,445 |
|
|
(1,527,190 |
) |
||||
Net realized gain (loss) on sales and dispositions of investments, before income taxes |
|
7,230,082 |
|
|
(2,802,731 |
) |
|
11,108,282 |
|
|
1,068,904 |
|
||||
Income tax expense |
|
— |
|
|
— |
|
|
— |
|
|
338,158 |
|
||||
Net realized gain (loss) on sales and dispositions of investments |
|
7,230,082 |
|
|
(2,802,731 |
) |
|
11,108,282 |
|
|
730,746 |
|
||||
Net change in unrealized appreciation/depreciation on investments: |
||||||||||||||||
Affiliate investments |
|
(5,153,166 |
) |
|
— |
|
|
3,596,779 |
|
|
(886,698 |
) |
||||
Non-Control/Non-Affiliate investments |
|
(512,375 |
) |
|
2,599,652 |
|
|
(4,373,590 |
) |
|
3,521,053 |
|
||||
Change in unrealized appreciation/depreciation before income taxes |
|
(5,665,541 |
) |
|
2,599,652 |
|
|
(776,811 |
) |
|
2,634,355 |
|
||||
Deferred income tax benefit |
|
(184,940 |
) |
|
— |
|
|
(232,774 |
) |
|
(66,441 |
) |
||||
Net change in unrealized appreciation/depreciation on investments |
|
(5,480,601 |
) |
|
2,599,652 |
|
|
(544,037 |
) |
|
2,700,796 |
|
||||
Net realized and unrealized gain (loss) on investments |
|
1,749,481 |
|
|
(203,079 |
) |
|
10,564,245 |
|
|
3,431,542 |
|
||||
Net increase in net assets from operations | $ |
2,636,516 |
|
$ |
595,504 |
|
$ |
11,773,670 |
|
$ |
5,437,671 |
|
||||
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 | $ |
1.02 |
|
$ |
0.23 |
|
$ |
4.56 |
|
$ |
2.11 |
|
Rand Capital Corporation and Subsidiaries |
||||||||||||||||
Consolidated Statements of Changes in Net Assets |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three months
|
Three months
|
Nine months
|
Nine months
|
||||||||||||
Net assets at beginning of period |
$ |
68,558,616 |
|
$ |
61,402,028 |
|
$ |
60,815,213 |
|
$ |
57,721,320 |
|
||||
Net investment income |
|
887,035 |
|
|
798,583 |
|
|
1,209,425 |
|
|
2,006,129 |
|
||||
Net realized gain (loss) on sales and dispositions of investments |
|
7,230,082 |
|
|
(2,802,731 |
) |
|
11,108,282 |
|
|
730,746 |
|
||||
Net change in unrealized appreciation/depreciation on investments |
|
(5,480,601 |
) |
|
2,599,652 |
|
|
(544,037 |
) |
|
2,700,796 |
|
||||
Net increase in net assets from operations |
|
2,636,516 |
|
|
595,504 |
|
|
11,773,670 |
|
|
5,437,671 |
|
||||
Declaration of dividend |
|
(748,496 |
) |
|
(645,255 |
) |
|
(2,142,247 |
) |
|
(1,806,714 |
) |
||||
Net assets at end of period |
$ |
70,446,636 |
|
$ |
61,352,277 |
|
$ |
70,446,636 |
|
$ |
61,352,277 |
|
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
|
Three months
|
Three months
|
Nine months
|
Nine months
|
|||||
|
|
|
|
|
|||||
Total expenses |
$ |
1,333,930 |
$ |
809,936 |
|
$ |
5,213,568 |
$ |
3,164,522 |
Exclude expenses/(credits) for capital gains incentive fees |
|
313,000 |
|
(41,300 |
) |
|
2,066,300 |
|
740,700 |
Adjusted total expenses |
$ |
1,020,930 |
$ |
851,236 |
|
$ |
3,147,268 |
$ |
2,423,822 |
Reconciliation of GAAP Net Investment Income per Share to
Adjusted Net Investment Income per Share
(Unaudited)
In addition to reporting Net Investment 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 Income per Share removing the effect of any expenses/(credits) for capital gains incentive fees. GAAP Net Investment 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
|
Three months
|
Nine months
|
Nine months
|
|||||
|
|
|
|
|
|||||
Net investment income per share |
$ |
0.34 |
$ |
0.31 |
|
$ |
0.47 |
$ |
0.78 |
Exclude expenses/(credits) for capital gains incentive fees per share |
|
0.12 |
|
(0.02 |
) |
|
0.80 |
|
0.28 |
Adjusted net investment income per share |
$ |
0.46 |
$ |
0.29 |
|
$ |
1.27 |
$ |
1.06 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106507003/en/
Company:
Daniel P. Penberthy
President and CEO
716.853.0802
dpenberthy@randcapital.com
Investors:
Deborah K. Pawlowski / Craig P. Mychajluk
Alliance Advisors IR
716-843-3908 / 716-843-3832
dpawlowski@allianceadvisors.com
cmychajluk@allianceadvisors.com
Source: Rand Capital Corporation
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