Logan Ridge Finance Corporation (“Logan Ridge”, “Logan”, “LRFC”,
“Company”, “we”, “us” or “our”) (Nasdaq: LRFC) announced today its
financial results for the second quarter ended June 30, 2024.
Second Quarter 2024
Highlights
- Total Investment Income increased
to $5.4 million for the quarter ended June 30, 2024, from $5.0
million reported for the quarter ended March 31, 2024.
- Net Investment Income (“NII”)
decreased to $0.8 million, or $0.28 per share, for the quarter
ended June 30, 2024 as compared to $0.9 million or $0.35 per share
reported in the quarter ended March 31, 2024. Net investment income
for the current quarter includes $0.3 million, or $0.10 per share,
of certain non-recurring incremental professional fees and other
expenses.
- Net asset value decreased to $33.13
per share as of June 30, 2024, from $33.71 per share as of March
31, 2024.
- Made approximately $1.5 million of
investments and had approximately $5.6 million in repayments and
sales of investments, resulting in net repayments and sales of
approximately $4.1 million during the quarter ended June 30,
2024.
Subsequent Events
- On August 7, 2024, the Company’s
Board of Directors approved a third quarter distribution of $0.33
per share, payable on August 30, 2024 to stockholders of record as
of August 22, 2024.
Management CommentaryTed
Goldthorpe, Chief Executive Officer and President of Logan Ridge,
said, “I am pleased to announce another solid quarter and half year
of financial performance for Logan Ridge. The first half results
are highlighted by net deployment of $4.8 million, along with an
increase in total investment income during the second quarter of
$0.4 million to $5.4 million. The underlying credit performance of
our portfolio has remained strong, with no new investments being
placed on non-accrual status during the quarter.
Further, the Company’s strong financial position
and the outlook for the long-term earnings power of the portfolio
has allowed the Board of Directors to approve a dividend of $0.33
per share for the third quarter of 2024.
Looking forward to the second half of 2024, we
continue to see attractive opportunities in our pipeline to deploy
our available capital. We believe we are well positioned to
continue to support the growth of our existing portfolio companies
and we will remain opportunistic deployers of capital in the
current market environment.”
Selected Financial Information
- Total investment
income for the quarter ended June 30, 2024, increased by
$0.1 million, to $5.4 million, compared to $5.3 million for the
second quarter of 2023.
- Total operating
expenses for the quarter ended June 30, 2024, increased by
$0.3 million, to $4.6 million, compared to $4.3 million for the
second quarter of 2023. Total operating expenses for the second
quarter of 2024 includes $0.3 million of certain non-recurring
incremental professional fees and other expenses.
- Net investment income for the quarter ended
June 30, 2024, was $0.8 million, or $0.28 per share, compared to
$1.0 million, or $0.38 per share, for the second quarter of 2023.
Net investment income for the quarter ended June 30, 2024 includes
$0.3 million, or $0.10 per share, of certain non-recurring
incremental professional fees and other expenses.
- Net asset value as of June 30, 2024, was $88.7
million, or $33.13 per share, compared to $90.2 million, or $33.71
per share, as of March 31, 2024.
- Cash and cash equivalents as of June 30, 2024,
were $4.3 million compared to $8.3 million as of March 31,
2024.
- The investment portfolio as of June 30, 2024,
consisted of investments in 61 portfolio companies with a fair
value of approximately $195.6 million. This compares to 62
portfolio companies with a fair value of approximately $200.1
million as of March 31, 2024.
- Deployment was judicious and prudent during
the quarter ended June 30, 2024. During the quarter, the Company
made approximately $1.5 million in investments and had $5.6 million
in repayments and sales of investments, resulting in net repayments
and sales of approximately $4.1 million for the quarter.
- The debt investment portfolio as of June 30,
2024 represented 80.0% of the fair value of the total portfolio,
with a weighted average annualized yield of approximately 11.4%
(excluding income from non-accruals and collateralized loan
obligations), compared to a debt investment portfolio of
approximately 80.8% with a weighted average annualized yield of
approximately 11.4% (excluding income from non-accruals and
collateralized loan obligations) as of March 31, 2024. As of June
30, 2024, 11.9% of the fair value of the debt investment portfolio
was bearing a fixed rate of interest, compared to 11.5% of the fair
value of the debt investment portfolio as of March 31, 2024.
- Non-Accruals: As of June 30, 2024, the Company
had debt investments in three portfolio companies on non-accrual
status with an amortized cost and fair value of $17.2 million and
$10.1 million, respectively, representing 8.5% and 5.2% of the
investment portfolio’s amortized cost and fair value, respectively.
This compares to debt investments in the same three portfolio
companies on non-accrual status with an aggregate amortized cost
and fair value of $17.2 million and $10.6 million, respectively,
representing 8.3% and 5.3% of the investment portfolio’s amortized
cost and fair value, respectively, at March 31, 2024.
- Asset coverage ratio as of June 30, 2024 was
176%.
Results of OperationsOur
operating results for the three and six months ended June 30, 2024
and June 30, 2023 were as follows (dollars in thousands):
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment income |
|
$ |
5,370 |
|
|
$ |
5,344 |
|
|
$ |
10,373 |
|
|
$ |
10,600 |
|
Total
expenses |
|
|
4,620 |
|
|
|
4,305 |
|
|
|
8,676 |
|
|
|
8,488 |
|
Net
investment income |
|
|
750 |
|
|
|
1,039 |
|
|
|
1,697 |
|
|
|
2,112 |
|
Net
realized gain (loss) on investments |
|
|
(200 |
) |
|
|
(2,362 |
) |
|
|
87 |
|
|
|
(3,868 |
) |
Net
change in unrealized appreciation (depreciation) on
investments |
|
|
(1,092 |
) |
|
|
4,563 |
|
|
|
(417 |
) |
|
|
4,346 |
|
Net
realized gain (loss) on extinguishment of debt |
|
|
(116 |
) |
|
|
— |
|
|
|
(174 |
) |
|
|
— |
|
Net
increase (decrease) in net assets resulting from operations |
|
$ |
(658 |
) |
|
$ |
3,240 |
|
|
$ |
1,193 |
|
|
$ |
2,590 |
|
|
Investment income The
composition of our investment income for the three and six months
ended June 30, 2024 and June 30, 2023 was as follows (dollars in
thousands):
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Interest income |
|
$ |
4,635 |
|
|
$ |
4,907 |
|
|
$ |
9,268 |
|
|
$ |
9,675 |
|
Payment-in-kind interest |
|
|
518 |
|
|
|
319 |
|
|
|
871 |
|
|
|
783 |
|
Dividend
income |
|
|
17 |
|
|
|
19 |
|
|
|
34 |
|
|
|
33 |
|
Other
income |
|
|
200 |
|
|
|
99 |
|
|
|
200 |
|
|
|
109 |
|
Total
investment income |
|
$ |
5,370 |
|
|
$ |
5,344 |
|
|
$ |
10,373 |
|
|
$ |
10,600 |
|
|
Fair Value of InvestmentsThe composition of our
investments as of June 30, 2024 and December 31, 2023, at amortized
cost and fair value of investments was as follows (dollars in
thousands):
June 30,
2024 |
|
Investments atAmortized Cost |
|
|
Amortized CostPercentage
ofTotal Portfolio |
|
|
Investments atFair Value |
|
|
Fair ValuePercentage
ofTotal Portfolio |
|
First Lien Debt |
|
$ |
133,516 |
|
|
|
65.8 |
% |
|
$ |
125,133 |
|
|
|
64.0 |
% |
Second
Lien Debt |
|
|
9,352 |
|
|
|
4.6 |
% |
|
|
8,012 |
|
|
|
4.1 |
% |
Subordinated Debt |
|
|
26,893 |
|
|
|
13.3 |
% |
|
|
23,218 |
|
|
|
11.9 |
% |
Collateralized Loan Obligations |
|
|
1,770 |
|
|
|
0.9 |
% |
|
|
1,596 |
|
|
|
0.8 |
% |
Joint
Venture |
|
|
393 |
|
|
|
0.2 |
% |
|
|
407 |
|
|
|
0.2 |
% |
Equity |
|
|
30,906 |
|
|
|
15.2 |
% |
|
|
37,187 |
|
|
|
19.0 |
% |
Total |
|
$ |
202,830 |
|
|
|
100.0 |
% |
|
$ |
195,553 |
|
|
|
100.0 |
% |
December 31,
2023 |
|
Investments atAmortized Cost |
|
|
Amortized CostPercentage
ofTotal Portfolio |
|
|
Investments atFair Value |
|
|
Fair ValuePercentage
ofTotal Portfolio |
|
First Lien Debt |
|
$ |
128,537 |
|
|
|
65.4 |
% |
|
$ |
124,007 |
|
|
|
65.4 |
% |
Second
Lien Debt |
|
|
8,968 |
|
|
|
4.6 |
% |
|
|
7,918 |
|
|
|
4.2 |
% |
Subordinated Debt |
|
|
26,573 |
|
|
|
13.5 |
% |
|
|
23,548 |
|
|
|
12.4 |
% |
Collateralized Loan Obligations |
|
|
1,600 |
|
|
|
0.8 |
% |
|
|
1,600 |
|
|
|
0.8 |
% |
Joint
Venture |
|
|
440 |
|
|
|
0.2 |
% |
|
|
450 |
|
|
|
0.2 |
% |
Equity |
|
|
30,400 |
|
|
|
15.5 |
% |
|
|
32,135 |
|
|
|
17.0 |
% |
Total |
|
$ |
196,518 |
|
|
|
100.0 |
% |
|
$ |
189,658 |
|
|
|
100.0 |
% |
|
Interest Rate Risk
Based on our consolidated statements of assets
and liabilities as of June 30, 2024, the following table shows the
annual impact on net income (excluding the potential related
incentive fee impact) of base rate changes in interest rates
(considering interest rate floors for variable rate securities),
assuming no changes in our investment and borrowing structure
(dollars in thousands):
Basis Point Change |
Increase(decrease) in interest
income |
|
|
(Increase)decrease
ininterest expense |
|
|
Increase(decrease) in net
income |
|
Up 300 basis points |
$ |
4,392 |
|
|
$ |
(1,620 |
) |
|
$ |
2,772 |
|
Up 200
basis points |
|
2,928 |
|
|
|
(1,080 |
) |
|
|
1,848 |
|
Up 100
basis points |
|
1,464 |
|
|
|
(540 |
) |
|
|
924 |
|
Down 100
basis points |
|
(1,464 |
) |
|
|
540 |
|
|
|
(924 |
) |
Down 200
basis points |
|
(2,928 |
) |
|
|
1,080 |
|
|
|
(1,848 |
) |
Down 300
basis points |
|
(4,307 |
) |
|
|
1,620 |
|
|
|
(2,687 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call and Webcast
We will hold a conference call on Friday, August
9, 2024, at 11:00 a.m. Eastern Time to discuss the second quarter
2024 financial results. Stockholders, prospective stockholders, and
analysts are welcome to listen to the call or attend the
webcast.
To access the conference call, please dial (646)
307-1963 approximately 10 minutes prior to the start of the call
and use the conference ID 4533143.
A replay of this conference call will be
available shortly after the live call through August 16, 2024.
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.loganridgefinance.com in the Investor
Resources section under Events and Presentations. The webcast can
also be accessed by clicking the following link:
https://edge.media-server.com/mmc/p/wk9wbtnf. The online archive of
the webcast will be available on the Company’s website shortly
after the call.
About Logan Ridge Finance
CorporationLogan Ridge Finance Corporation (Nasdaq: LRFC)
is a business development company that invests primarily in first
lien loans and, to a lesser extent, second lien loans and equity
securities issued by lower middle-market companies. The Company
invests in performing, well-established middle-market businesses
that operate across a wide range of industries. It employs
fundamental credit analysis, targeting investments in businesses
with relatively low levels of cyclicality and operating risk. For
more information, visit www.loganridgefinance.com.
About Mount Logan Capital Inc.
Mount Logan Capital Inc. (“MLC”) is an alternative asset management
company that is focused on public and private debt securities in
the North American market. MLC seeks to source and actively manage
loans and other debt-like securities with credit-oriented
characteristics. MLC actively sources, evaluates, underwrites,
manages, monitors, and primarily invests in loans, debt securities,
and other credit-oriented instruments that present attractive
risk-adjusted returns and present low risk of principal impairment
through the credit cycle.
About BC Partners Advisors L.P. and BC
Partners CreditBC 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 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 communication contains
“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. 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. 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 those risk factors detailed in the Company’s
reports filed with the Securities and Exchange Commission (“SEC”),
including the Company’s annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and other
documents filed with the SEC.
Any forward-looking statements speak only as of
the date of this communication. The Company does not undertake any
obligation to update any forward-looking statements, whether as a
result of new information or developments, future events or
otherwise, except as required by law. Readers are cautioned not to
place undue reliance on any of these forward-looking
statements.
For additional information, contact:
Logan Ridge Finance Corporation650 Madison Avenue, 3rd FloorNew
York, NY 10022
Brandon SatorenChief Financial Officer
Brandon.Satoren@bcpartners.com (212) 891-2880
Lena Cati The Equity Group
Inc.lcati@equityny.com (212) 836-9611
Val FerraroThe Equity Group
Inc.vferraro@equityny.com (212) 836-9633
Logan Ridge Finance
CorporationConsolidated Statements of Assets and
Liabilities (in thousands, except share and per
share data) |
|
|
|
As of June 30,2024 |
|
|
As of December 31,2023 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Investments at fair
value: |
|
|
|
|
|
|
Non-control/non-affiliate investments (amortized cost of $172,733
and $170,972, respectively) |
|
$ |
157,181 |
|
|
$ |
161,880 |
|
Affiliate investments (amortized cost of $30,097 and $25,546,
respectively) |
|
|
38,372 |
|
|
|
27,778 |
|
Total investments at fair value (amortized cost of $202,830 and
$196,518, respectively) |
|
|
195,553 |
|
|
|
189,658 |
|
Cash and cash equivalents |
|
|
4,284 |
|
|
|
3,893 |
|
Interest and dividend
receivable |
|
|
2,017 |
|
|
|
1,374 |
|
Prepaid expenses |
|
|
1,783 |
|
|
|
2,163 |
|
Other assets |
|
|
687 |
|
|
|
— |
|
Total assets |
|
$ |
204,324 |
|
|
$ |
197,088 |
|
LIABILITIES |
|
|
|
|
|
|
2026 Notes (net of deferred
financing costs and original issue discount of $876 and $1,057,
respectively) |
|
$ |
49,124 |
|
|
$ |
48,943 |
|
2032 Convertible Notes (net of
deferred financing costs and original issue discount of $751 and
$999, respectively) |
|
|
11,249 |
|
|
|
14,001 |
|
KeyBank Credit Facility (net
of deferred financing costs of $812 and $982, respectively) |
|
|
52,293 |
|
|
|
38,571 |
|
Management and incentive fees
payable |
|
|
909 |
|
|
|
869 |
|
Interest and financing fees
payable |
|
|
1,092 |
|
|
|
949 |
|
Accounts payable and accrued
expenses |
|
|
996 |
|
|
|
833 |
|
Payable for unsettled
trades |
|
|
— |
|
|
|
3,747 |
|
Total liabilities |
|
$ |
115,663 |
|
|
$ |
107,913 |
|
Commitments and
contingencies |
|
|
|
|
|
|
NET ASSETS |
|
|
|
|
|
|
Common stock, par value $0.01,
100,000,000 shares of common stock authorized, 2,676,062 and
2,674,698 shares of common stock issued and outstanding,
respectively |
|
$ |
27 |
|
|
$ |
27 |
|
Capital in excess of par
value |
|
|
188,437 |
|
|
|
188,405 |
|
Total distributable loss |
|
|
(99,803 |
) |
|
|
(99,257 |
) |
Total net assets |
|
$ |
88,661 |
|
|
$ |
89,175 |
|
Total liabilities and net
assets |
|
$ |
204,324 |
|
|
$ |
197,088 |
|
Net asset value per share |
|
$ |
33.13 |
|
|
$ |
33.34 |
|
Logan Ridge Finance
CorporationConsolidated Statements of
Operations (in thousands, except share and per
share data)
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
INVESTMENT INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments |
|
$ |
4,526 |
|
|
$ |
4,773 |
|
|
$ |
9,159 |
|
|
$ |
9,377 |
|
Affiliate investments |
|
|
109 |
|
|
|
134 |
|
|
|
109 |
|
|
|
298 |
|
Total interest income |
|
|
4,635 |
|
|
|
4,907 |
|
|
|
9,268 |
|
|
|
9,675 |
|
Payment-in-kind interest and
dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments |
|
|
476 |
|
|
|
271 |
|
|
|
812 |
|
|
|
687 |
(1) |
Affiliate investments |
|
|
42 |
|
|
|
48 |
|
|
|
59 |
|
|
|
96 |
|
Total payment-in-kind interest and dividend income |
|
|
518 |
|
|
|
319 |
|
|
|
871 |
|
|
|
783 |
|
Dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate investments |
|
|
17 |
|
|
|
19 |
|
|
|
34 |
|
|
|
33 |
|
Total dividend income |
|
|
17 |
|
|
|
19 |
|
|
|
34 |
|
|
|
33 |
|
Other income: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments |
|
|
46 |
|
|
|
99 |
|
|
|
46 |
|
|
|
109 |
|
Affiliate investments |
|
|
154 |
|
|
|
— |
|
|
|
154 |
|
|
|
— |
|
Total other income |
|
|
200 |
|
|
|
99 |
|
|
|
200 |
|
|
|
109 |
|
Total investment income |
|
|
5,370 |
|
|
|
5,344 |
|
|
|
10,373 |
|
|
|
10,600 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing
expenses |
|
|
2,303 |
|
|
|
2,236 |
|
|
|
4,310 |
|
|
|
4,305 |
|
Base management fee |
|
|
909 |
|
|
|
946 |
|
|
|
1,802 |
|
|
|
1,876 |
|
Directors' expense |
|
|
175 |
|
|
|
135 |
|
|
|
325 |
|
|
|
270 |
|
Administrative service
fees |
|
|
255 |
|
|
|
224 |
|
|
|
456 |
|
|
|
481 |
|
General and administrative
expenses |
|
|
978 |
|
|
|
764 |
|
|
|
1,783 |
|
|
|
1,556 |
|
Total expenses |
|
|
4,620 |
|
|
|
4,305 |
|
|
|
8,676 |
|
|
|
8,488 |
|
NET INVESTMENT INCOME |
|
|
750 |
|
|
|
1,039 |
|
|
|
1,697 |
|
|
|
2,112 |
|
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) on
investments: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments |
|
|
(200 |
) |
|
|
(2,362 |
) |
|
|
87 |
|
|
|
(3,868 |
) |
Net realized gain (loss) on investments |
|
|
(200 |
) |
|
|
(2,362 |
) |
|
|
87 |
|
|
|
(3,868 |
) |
Net change in unrealized
appreciation (depreciation) on investments: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments |
|
|
(2,556 |
) |
|
|
510 |
|
|
|
(6,460 |
) |
|
|
(740 |
) |
Affiliate investments |
|
|
1,464 |
|
|
|
4,053 |
|
|
|
6,043 |
|
|
|
5,086 |
|
Net change in unrealized appreciation (depreciation) on
investments |
|
|
(1,092 |
) |
|
|
4,563 |
|
|
|
(417 |
) |
|
|
4,346 |
|
Total net realized and change in unrealized gain (loss) on
investments |
|
|
(1,292 |
) |
|
|
2,201 |
|
|
|
(330 |
) |
|
|
478 |
|
Net realized loss on
extinguishment of debt |
|
|
(116 |
) |
|
|
— |
|
|
|
(174 |
) |
|
|
— |
|
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS |
|
$ |
(658 |
) |
|
$ |
3,240 |
|
|
$ |
1,193 |
|
|
$ |
2,590 |
|
NET INCREASE (DECREASE) IN NET
ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC |
|
$ |
(0.25 |
) |
|
$ |
1.20 |
|
|
$ |
0.45 |
|
|
$ |
0.96 |
|
WEIGHTED AVERAGE COMMON STOCK
OUTSTANDING – BASIC |
|
|
2,676,018 |
|
|
|
2,703,871 |
|
|
|
2,677,187 |
|
|
|
2,707,399 |
|
NET INCREASE (DECREASE) IN NET
ASSETS PER SHARE RESULTING FROM OPERATIONS – DILUTED |
|
$ |
(0.25 |
) |
|
$ |
1.07 |
|
|
$ |
0.45 |
|
|
$ |
0.94 |
|
WEIGHTED AVERAGE COMMON STOCK
OUTSTANDING – DILUTED |
|
|
2,676,018 |
|
|
|
3,243,374 |
|
|
|
2,677,187 |
|
|
|
3,246,902 |
|
DISTRIBUTIONS PAID PER
SHARE |
|
$ |
0.33 |
|
|
$ |
0.22 |
|
|
$ |
0.65 |
|
|
$ |
0.40 |
|
(1) During the six months ended June 30,
2023, the Company received $0.2 million of non-recurring income
that was paid-in-kind and included in this financial statement line
item.
Logan Ridge Finance (NASDAQ:LRFC)
Graphique Historique de l'Action
De Nov 2024 à Déc 2024
Logan Ridge Finance (NASDAQ:LRFC)
Graphique Historique de l'Action
De Déc 2023 à Déc 2024