Eagle Point Income Company Inc. (the “Company”) (NYSE: EIC,
EICA) today announced financial results for the quarter ended
September 30, 2022, net asset value (“NAV”) as of September 30,
2022 and certain additional activity through October 31, 2022.
THIRD QUARTER 2022 HIGHLIGHTS
- Net investment income (“NII”) of $0.47 per weighted average
common share, excluding certain non-recurring expenses.1 When
non-recurring expenses are included, that measure was $0.40.2
- NAV per common share of $13.05 as of September 30, 2022.
- GAAP net loss (inclusive of unrealized mark-to-market losses)
of $3.6 million, or $0.51 per weighted average common share.
- Weighted average effective yield of the Company’s
collateralized loan obligation (“CLO”) debt and equity portfolio,
based on amortized cost, was 12.77% as of September 30, 2022.
Weighted average expected yield of the Company’s CLO portfolio,
based on fair market value, was 19.15% as of September 30,
2022.3
- Received $5.2 million in recurring cash distributions4 from the
Company’s investment portfolio.
SUBSEQUENT EVENTS
- NAV per common share estimated to be between $12.81 and $12.91
as of October 31, 2022.
- As of October 31, 2022, the Company had approximately $6.3
million of cash and capacity on its revolving credit facility
available for investment.
- On November 7, 2022, declared a 14% increase in common stock
monthly distributions to $0.16 per share beginning with the
distribution payable on January 31, 2023.
“We had a strong quarter as our portfolio continues to
materially benefit from the rising interest rate environment,” said
Thomas Majewski, Chairman and Chief Executive Officer. “We
generated NII of $0.47 per common share, excluding non-recurring
expenses. This once again exceeded the distributions we paid during
the quarter. In addition, due to the over 2% increase in LIBOR
between July and October, we expect cash flows from our CLO debt
securities will continue to increase. Given our confidence in the
Company’s future outlook, we were pleased last week to once again
raise our monthly common distributions by 14% to $0.16 per share
for the first quarter of 2023. We remain well positioned to
generate compelling risk-adjusted returns over the long term.”
THIRD QUARTER 2022 RESULTS
The Company’s NII for the quarter ended September 30, 2022 was
$0.40 per weighted average common share, net of non-recurring
expenses. This compared to $0.41 of NII and realized capital gains
per weighted average common share for the quarter ended June 30,
2022 and $0.31 of NII and realized capital losses per weighted
average common share for the quarter ended September 30, 2021.
NII for the quarter ended September 30, 2022 is net of
non-recurring expenses of $0.07 per weighted average common share,
which represents certain fees paid in connection with the Company’s
committed equity financing arrangement.
For the quarter ended September 30, 2022, the Company recorded a
GAAP net loss of $3.6 million, or $0.51 per weighted average common
share. The net loss was comprised of total investment income of
$5.0 million, offset by unrealized depreciation (or unrealized
mark-to-market losses in the value of the Company’s investments and
certain liabilities at fair value) of $6.4 million and total
expenses of $2.2 million.
NAV as of September 30, 2022 was $91.4 million, or $13.05 per
common share, which is $0.61 lower than the Company’s NAV per
common share as of June 30, 2022, and $4.64 lower than the
Company’s NAV per common share as of September 30, 2021.
During the quarter ended September 30, 2022, the Company
received $5.2 million of recurring cash distributions from its
investment portfolio, or $0.74 per weighted average common share,
which was well in excess of the Company’s aggregate distributions
on its common stock and operating costs for the quarter.
As of September 30, 2022, the weighted average effective yield
on the Company’s CLO debt and equity portfolio, based on amortized
cost, was 12.77%, compared to 12.08% as of June 30, 2022 and 10.27%
as of September 30, 2021.
PORTFOLIO STATUS
As of September 30, 2022, on a look-through basis, and based on
the most recent CLO trustee reports received by such date, the
Company had indirect exposure to approximately 1,460 unique
corporate obligors. The largest look-through obligor represented
0.9% of the Company’s CLO debt and equity portfolio. The top-ten
largest look-through obligors together represented 5.9% of the
Company’s CLO debt and equity portfolio.
As of September 30, 2022, the Company had outstanding borrowings
from the revolving credit facility and Series A Term Preferred
Stock which totaled approximately 40% of total assets (less current
liabilities). Over the long term, management expects the Company to
operate under normal market conditions generally with leverage
between 25% and 35% of total assets (less current liabilities).
Based on applicable market conditions at any given time, or should
significant opportunities present themselves, the Company may incur
leverage in excess of this amount, subject to applicable regulatory
and contractual limits.
FOURTH QUARTER 2022 PORTFOLIO ACTIVITY THROUGH OCTOBER 31,
2022 AND OTHER UPDATES
As of October 31, 2022, the Company had approximately $6.3
million of cash and capacity on its revolving credit facility
available for investment.
As previously published on the Company’s website, management’s
estimate of the Company’s range of NAV per common share as of
October 31, 2022 was $12.81 to $12.91.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.14 per common
share on October 31, 2022 to stockholders of record as of October
11, 2022. Additionally, and as previously announced, the Company
declared distributions of $0.14 per share of common stock payable
on November 30, 2022 and December 30, 2022 to stockholders of
record as of November 10, 2022 and December 12, 2022, respectively;
and distributions of $0.16 per share of common stock payable on
January 31, 2023, February 28, 2023 and March 31, 2023 to
stockholders of record as of January 11, 2023, February 8, 2023 and
March 13, 2023, respectively. The ability of the Company to declare
and pay distributions is subject to a number of factors, including
the Company’s results of operations.
The Company paid a monthly distribution of $0.104167 per share
of the Company’s Series A Term Preferred Stock on October 31, 2022
to stockholders of record on October 11, 2022. The distribution
represented a 5.00% annualized rate, based on the $25 liquidation
preference per share for the Series A Term Preferred Stock.
Additionally, and as previously announced, the Company declared
distributions of $0.104167 per share on its Series A Term Preferred
Stock, payable on November 30, 2022, December 30, 2022, January 31,
2023, February 28, 2023 and March 31, 2023 to stockholders of
record as of November 10, 2022, December 12, 2022, January 11,
2023, February 8, 2023 and March 13, 2023, respectively.
Distributions on stock are generally paid from net investment
income (regular interest and dividends) and may also include
capital gains and/or a return of capital. The specific tax
characteristics of the distributions will be reported to the
Company’s stockholders on Form 1099 after the end of the calendar
year.
CONFERENCE CALL
The Company will host a conference call at 11:30 a.m. (Eastern
Time) today to discuss the Company’s financial results for the
quarter ended September 30, 2022, as well as a portfolio
update.
All interested parties may participate in the conference call by
dialing (877) 704-4453 (domestic) or (201) 389-0920
(international). Please reference Conference ID 13732840 when
calling and you are invited to dial in approximately 10 to 15
minutes prior to the start of the call.
A live webcast will also be available on the Company’s website
(www.eaglepointincome.com). Please go to the Investor Relations
section at least 15 minutes prior to the call to register, download
and install any necessary audio software.
An archived replay of the call will be available shortly
afterwards until December 15, 2022. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13732840.
ADDITIONAL INFORMATION
The Company has made available on the investor relations section
of its website, www.eaglepointincome.com (in the financial
statements and reports section), its unaudited consolidated
financial statements as of and for the period ended September 30,
2022. The Company has also filed this report with the Securities
and Exchange Commission (“SEC”). The Company also published on its
website (in the presentations and events section) an investor
presentation, which contains additional information about the
Company and its portfolio as of and for the quarter ended September
30, 2022.
ABOUT EAGLE POINT INCOME COMPANY
The Company is a diversified, closed-end management investment
company. The Company’s primary investment objective is to generate
high current income, with a secondary objective to generate capital
appreciation, by investing primarily in junior debt tranches of
CLOs. In addition, the Company may invest up to 35% of its total
assets (at the time of investment) in CLO equity securities. The
Company is externally managed and advised by Eagle Point Income
Management LLC.
The Company makes certain unaudited portfolio information
available each month on its website in addition to making certain
other unaudited financial information available on its website
(www.eaglepointincome.com). This information includes (1) an
estimated range of the Company’s net investment income (“NII”) and
realized capital gains or losses per share of common stock for each
calendar quarter end, generally made available within the first
fifteen days after the applicable calendar month end, (2) an
estimated range of the Company’s net asset value (“NAV”) per share
of common stock for the prior month end and certain additional
portfolio-level information, generally made available within the
first fifteen days after the applicable calendar month end, and (3)
during the latter part of each month, an updated estimate of NAV,
if applicable, and, with respect to each calendar quarter end, an
updated estimate of the Company’s NII and realized capital gains or
losses per share for the applicable quarter, if available.
FORWARD-LOOKING STATEMENTS
This press release may contain “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 or results
and involve a number of risks and uncertainties. Actual results may
differ materially from those in the forward-looking statements as a
result of a number of factors, including those described in the
prospectus and the Company’s other filings with the SEC. The
Company 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.
1 “Per weighted average common share” is based on the average
daily number of shares of common stock outstanding for the period
and “per share” refers to per share of the Company’s common
stock.
2 Non-recurring expenses of $0.07 per weighted average common
share represents certain fees paid in connection with the Company’s
committed equity financing arrangement.
3 Weighted average effective yield is based on an investment’s
amortized cost whereas weighted average expected yield is based on
an investment’s fair market value as of the applicable period end
as disclosed in the Company’s financial statements, which is
subject to change from period to period. Please refer to the
Company’s quarterly unaudited financial statements for additional
disclosures.
4 “Recurring cash distributions” refers to the quarterly
distributions received by the Company from its CLO debt and equity
investments.
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version on businesswire.com: https://www.businesswire.com/news/home/20221115005698/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointIncome.com www.eaglepointincome.com
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