Runway Growth Finance Corp. Reports Third Quarter 2022 Financial Results
Runway Growth Finance reported a record total investment income of $27.3 million and net investment income of $14.5 million, or $0.36 per share, for Q3 2022. The total investment portfolio grew to a record $910.2 million with a dollar-weighted annualized yield on debt investments of 14.4%. The company declared a 9% increase in its quarterly dividend to $0.36 per share, reflecting strong financial performance. As of September 30, 2022, net asset value per share was $14.12.
- Total investment income increased to $27.3 million, up from $18.6 million year-over-year.
- Net investment income grew to $14.5 million, or $0.36 per share, compared to $10.7 million, or $0.32 per share, in the prior year.
- Investment portfolio reached a record $910.2 million, up significantly from $646.4 million a year ago.
- Declared a quarterly dividend of $0.36 per share, a 9% increase from the previous quarter.
- Established a core leverage ratio of approximately 60%, indicating increased portfolio leverage.
- Operating expenses rose to $12.8 million, significantly above $7.9 million in Q3 2021.
- Net change in unrealized depreciation on investments was $3.2 million, worsening from $1.2 million the previous year.
Delivered Record Total and Net Investment Income of
Increased Core Leverage Ratio of Portfolio to
Grew Investment Portfolio to Record
Conference Call Today, Thursday, November 3 at 6:00 p.m. ET
WOODSIDE, Calif., Nov. 03, 2022 (GLOBE NEWSWIRE) -- Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the “Company”), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced its financial results for the third quarter ended September 30, 2022.
Third Quarter 2022 Highlights
- Total investment income of
$27.3 million - Net investment income of
$14.5 million , or$0.36 per share - Total investment portfolio of
$910.2 million at fair value - Net asset value of
$14.12 per share - Dollar-weighted annualized yield on debt investments of
14.4% for the quarter - Nine investments completed in new and existing portfolio companies totaling
$216.0 million in new commitments including$161.0 million in funded loans - Aggregate proceeds of
$55.0 million received from principal repayments - Declared fourth quarter dividend of
$0.36 per share, up9% quarter over quarter
“Runway Growth delivered its third consecutive record quarter, driven by our team’s disciplined execution against our strategic initiatives,” said David Spreng, Founder and CEO of Runway Growth. “Our success speaks to the value of our credit-driven investment process, which provides the downside protection of debt with the potential for the upside of equity.”
Spreng continued, “Runway Growth’s weatherproof platform is well positioned with the strongest pipeline we have seen to date. We will continue to serve companies that are embracing venture debt as a vehicle for growth. As we approach year end, the Runway team remains focused on generating prudent portfolio growth through deploying leverage to enhance long-term shareholder value.”
Third Quarter 2022 Operating Results
Total investment income for the quarter ended September 30, 2022 was
Net investment income for the quarter ended September 30, 2022 was
The Company's dollar-weighted annualized yield on average debt investments for the quarter ended September 30, 2022 was
Total operating expenses for the quarter ended September 30, 2022 were
Net realized gain on investments for the quarter ended September 30, 2022 was
For the quarter ended September 30, 2022, net change in unrealized depreciation on investments was
Portfolio and Investment Activity
As of September 30, 2022, Runway Growth’s investment portfolio had an aggregate fair value of approximately
During the third quarter of 2022, Runway Growth originated nine investments totaling
Total portfolio investment activity for the three and nine months ended September 30, 2022, and 2021 was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Beginning Investment Portfolio | $ | 807,728,604 | $ | 617,617,043 | $ | 729,516,274 | $ | 621,826,650 | |||||||||
| Purchases of Investments(1) | 160,562,001 | 103,788,323 | 399,164,647 | 239,458,881 | |||||||||||||
| Purchases of U.S. Treasury Bills | — | 60,000,660 | — | 115,000,509 | |||||||||||||
| Amortization of Fixed Income Premiums or Accretion of Discounts | 1,004,909 | 1,879,221 | 4,575,984 | 5,539,659 | |||||||||||||
| Sales or Repayments of Investments | (56,351,393 | ) | (102,817,182 | ) | (143,144,652 | ) | (197,534,296 | ) | |||||||||
| Scheduled Principal Payments of Investments | — | (3,605,000 | ) | (7,265,675 | ) | (5,671,437 | ) | ||||||||||
| Sales and Maturities of U.S. Treasury Bills | — | (29,999,956 | ) | (44,999,747 | ) | (124,999,118 | ) | ||||||||||
| Realized Gain (Loss) on Investments | 406,917 | 718,310 | 939,377 | (4,094,970 | ) | ||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on Investments | (3,182,093 | ) | (1,228,382 | ) | (28,617,263 | ) | (3,172,841 | ) | |||||||||
| Ending Investment Portfolio | $ | 910,168,945 | $ | 646,353,037 | $ | 910,168,945 | $ | 646,353,037 | |||||||||
| 1. Includes PIK interest. | |||||||||||||||||
Net Asset Value
As of September 30, 2022, net asset value (“NAV’”) per share was
For the quarter ended September 30, 2022, net increase in net assets resulting from operations was
Liquidity and Capital Resources
As of September 30, 2022, the Company had approximately
The Company ended the quarter with a core leverage ratio of approximately 60.0, compared to
Distributions
On October 27, 2022, the Company’s board of directors declared a regular quarterly distribution of
Conference Call
Runway Growth will hold a conference call to discuss its third quarter 2022 financial results at 3:00 p.m. PT (6:00 p.m. ET) on Thursday, November 3, 2022. To participate in the conference call or webcast, participants should register online at the Runway Investor Relations website. The earnings call can also be accessed through the following links:
A live webcast will be available in the investor section of the Company’s website, and will be archived for 90 days following the call.
About Runway Growth Finance Corp.
Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity. Runway Growth is a closed-end investment fund that has elected to be regulated as a business development company under the Investment Company Act of 1940. Runway Growth is externally managed by Runway Growth Capital LLC, an established registered investment advisor that was formed in 2015 and led by industry veteran David Spreng. For more information, please visit www.runwaygrowth.com.
Forward-Looking Statements
Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our portfolio companies, our industry and the global economy. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
IR Contacts:
Stefan Norbom, Prosek Partners, snorbom@prosek.com
Thomas B. Raterman, Chief Financial Officer and Chief Operating Officer, tr@runwaygrowth.com
| Runway Growth Finance Corp. | ||||||||
| Statements of Assets and Liabilities | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Investments at fair value: | ||||||||
| Non-control/non-affiliate investments at fair value (cost of | $ | 903,521,674 | $ | 655,384,403 | ||||
| Affiliate investments at fair value (cost of | 2,180,230 | — | ||||||
| Control investments at fair value (cost of | 4,467,041 | 29,130,371 | ||||||
| Investment in U.S. Treasury Bills at fair value (cost of | — | 45,001,500 | ||||||
| Total investments at fair value (cost of | 910,168,945 | 729,516,274 | ||||||
| Cash and cash equivalents | 5,774,074 | 4,696,693 | ||||||
| Accrued interest receivable | 4,402,598 | 2,368,680 | ||||||
| Other accounts receivable | 1,823,611 | 816,065 | ||||||
| Prepaid expenses | 99,507 | 949,768 | ||||||
| Total assets | 922,268,735 | 738,347,480 | ||||||
| Liabilities | ||||||||
| Debt: | ||||||||
| Credit facilities, net | 170,009,357 | 59,864,489 | ||||||
| 2026 Notes, net | 69,130,314 | 19,623,971 | ||||||
| 2027 Notes, net | 97,405,095 | — | ||||||
| Total debt, less unamortized deferred debt costs | 336,544,766 | 79,488,460 | ||||||
| Reverse repurchase agreement | — | 44,774,963 | ||||||
| Accrued incentive fees | 7,188,966 | 6,010,250 | ||||||
| Due to affiliate | 261,180 | 221,243 | ||||||
| Interest payable | 3,195,407 | 249,247 | ||||||
| Accrued expenses and other liabilities | 1,418,045 | 1,408,826 | ||||||
| Total liabilities | 348,608,364 | 132,152,989 | ||||||
| Net assets | ||||||||
| Common stock, par value | 413,806 | 413,806 | ||||||
| Additional paid-in capital | 606,063,671 | 606,047,671 | ||||||
| Distributable (losses) | (23,515,173 | ) | (266,986 | ) | ||||
| Treasury stock | (9,301,933 | ) | — | |||||
| Total net assets | $ | 573,660,371 | $ | 606,194,491 | ||||
| Shares of common stock outstanding ( | 40,635,858 | 41,380,614 | ||||||
| Net asset value per share | $ | 14.12 | $ | 14.65 | ||||
| Runway Growth Finance Corp. | ||||||||||||||||
| Statements of Operations | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Investment income | ||||||||||||||||
| From non-control/non-affiliate investments: | ||||||||||||||||
| Interest income | $ | 25,365,328.00 | $ | 16,732,069.00 | $ | 61,749,677.00 | $ | 47,542,136.00 | ||||||||
| Payment in-kind interest income | 1,199,498.00 | 434,464.00 | 3,248,563.00 | 2,424,022.00 | ||||||||||||
| Dividend income | 317,674.00 | 343,755.00 | 1,020,766.00 | 1,031,265.00 | ||||||||||||
| Fee income | 445,399.00 | 982,190.00 | 1,519,292.00 | 2,663,160.00 | ||||||||||||
| From affiliate investments: | ||||||||||||||||
| Interest income | — | — | 4,654 | — | ||||||||||||
| Payment in-kind interest income | — | — | 96,291 | — | ||||||||||||
| Fee income | — | — | 8,311 | — | ||||||||||||
| From control investments: | ||||||||||||||||
| Interest income | — | 113,554 | 1,112,421 | 113,554 | ||||||||||||
| Payment in-kind interest income | — | 3,786 | 2,984,450 | 3,786 | ||||||||||||
| Other income | 805 | 248 | 1,268 | 517 | ||||||||||||
| Total investment income | 27,328,704 | 18,610,066 | 71,745,693 | 53,778,440 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Management fees | 3,065,581 | 2,301,656 | 8,487,820 | 6,647,207 | ||||||||||||
| Incentive fees | 3,625,686 | 2,686,475 | 8,590,821 | 6,498,482 | ||||||||||||
| Interest expense | 3,588,289 | 812,852 | 6,070,906 | 2,302,582 | ||||||||||||
| Professional fees | 720,115 | 612,854 | 1,968,036 | 1,433,360 | ||||||||||||
| Overhead allocation expense | 258,191 | 249,141 | 713,457 | 655,260 | ||||||||||||
| Insurance expense | 268,806 | 23,087 | 806,042 | 69,638 | ||||||||||||
| Administration fee | 161,245 | 179,500 | 497,896 | 420,360 | ||||||||||||
| Debt financing fees | 794,124 | 738,087 | 2,226,658 | 1,447,288 | ||||||||||||
| Directors’ fees | 90,727 | 67,750 | 261,727 | 201,750 | ||||||||||||
| Tax expense | — | — | 1,073 | 41 | ||||||||||||
| Other expenses | 258,991 | 197,540 | 685,841 | 539,142 | ||||||||||||
| Total operating expenses | 12,831,755 | 7,868,942 | 30,310,277 | 20,215,110 | ||||||||||||
| Net investment income | 14,496,949 | 10,741,124 | 41,435,416 | 33,563,330 | ||||||||||||
| Realized and unrealized gain (loss) on investments | ||||||||||||||||
| Realized gain (loss) on non control/non-affiliate investments, including U.S. Treasury Bills | 406,917 | 718,310 | 939,442 | (4,076,766 | ) | |||||||||||
| Realized gain (loss) on control investments | — | — | (65 | ) | — | |||||||||||
| Net realized gain (loss) on investments | 406,917 | 718,310 | 939,377 | (4,076,766 | ) | |||||||||||
| Net change in unrealized appreciation (depreciation) on non-control/non-affiliate investments, including U.S. Treasury Bills | (1,956,044 | ) | (6,857,594 | ) | (14,275,206 | ) | (10,979,143 | ) | ||||||||
| Net change in unrealized appreciation (depreciation) on affiliate investments | (171,789 | ) | — | (3,380,221 | ) | — | ||||||||||
| Net change in unrealized appreciation (depreciation) on control investments | (1,054,260 | ) | 5,629,212 | (10,961,836 | ) | 7,806,302 | ||||||||||
| Net change in unrealized appreciation (depreciation) on investments and U.S. Treasury Bills | (3,182,093 | ) | (1,228,382 | ) | (28,617,263 | ) | (3,172,841 | ) | ||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 11,721,773 | 10,231,052 | $ | 13,757,530 | $ | 26,313,723 | |||||||||
| Net increase in net assets resulting from operations per common share | $ | 0.29 | 0.31 | $ | 0.33 | $ | 0.81 | |||||||||
| Net investment income per common share | $ | 0.36 | 0.32 | $ | 1.01 | $ | 1.04 | |||||||||
| Weighted-average shares outstanding | 40,774,154 | 33,160,481 | 41,119,467 | 32,360,107 | ||||||||||||
FAQ
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