Logan Ridge Finance Corporation Announces First Quarter 2023 Financial Results
Reports a Strong First Quarter with Net Investment Income of
Announces Distribution of
Began Purchasing Shares Under its New Share Repurchase Program
First Quarter 2023 Highlights
- Reported Net Investment Income (“NII”) of
$1.1 million or$0.40 per share, inclusive of$0.06 of non-recurring net investment income, which marks the Company’s third consecutive quarter of positive NII and a 69% increase over the prior quarter. - Net asset value decreased to
$34.63 per share as ofMarch 31, 2023 from$35.04 per share in the prior quarter. - As of
March 31, 2023 , our portfolio consisted of investments in 59 portfolio companies with a fair value of approximately$203.3 million . During the quarter, the Company made approximately$7.4 million of investments and had approximately$6.7 million in repayments and sales of investments, resulting in net deployment of approximately$0.7 million . - During the three months ended
March 31, 2023 , the Company repurchased 1,625 shares at an aggregate cost of approximately$34,000 , under its$5.0 million share repurchase program authorized by the Board of Directors onMarch 6, 2023 , which resulted in an increase to the net asset value per share of$0.01 .
Subsequent Events
- On
May 9, 2023 , the Company’s Board of Directors approved a distribution of$0.22 per share payable onMay 31, 2023 to stockholders of record as ofMay 22, 2023 .
Management Commentary
Selected Financial Information
- Total investment income for the first quarter of 2023 increased by
$2.0 million , to$5.3 million , compared to the first quarter of 2022. - Total operating expenses for the first quarter of 2023 declined by
$0.2 million , to$4.2 million , compared to$4.4 million for the first quarter of 2022. - Net investment income for the first quarter of 2023 was
$1.1 million (inclusive of$0.2 million of non-recurring income) as compared to a net investment loss of$1.1 million for the first quarter ended 2022. - Net asset value as of
March 31, 2023 was$93.8 million , or$34.63 per share, as compared to$95.0 million , or$35.04 per share, as ofDecember 31, 2022 . - Cash and cash equivalents as of
March 31, 2023 were$9.3 million as compared to$6.8 million as ofDecember 31, 2022 . - The investment portfolio as of
March 31, 2023 consisted of investments in 59 portfolio companies with a fair value of approximately$203.3 million . This compares to 59 portfolio companies with a fair value of approximately$203.6 million as ofDecember 31, 2022 . - Deployment remained strong. During the first quarter of 2023, we made approximately
$7.4 million of investments and had approximately$6.7 million in repayments and sales of investments, resulting in net deployment of approximately$0.7 million for the period. - The debt investment portfolio as of
March 31, 2023 represented 83.1% of the fair value of our total portfolio, with a weighted average annualized yield of approximately 10.7% (excluding the income from non-accruals and collateralized loan obligations), compared to a debt investment portfolio of approximately 83.2% with a weighted average annualized yield of approximately 10.4% (excluding the income from non-accruals and collateralized loan obligations) atDecember 31, 2022 . As ofMarch 31, 2023 , 16.6% of the fair value of our debt investment portfolio was bearing a fixed rate of interest, compared to 17.2% of the fair value of our debt investment portfolio as ofDecember 31, 2022 . - Non-Accruals: As of
March 31, 2023 , we had debt investments in two portfolio companies on non-accrual status with an amortized cost and fair value of$14.2 million and$10.0 million , respectively, representing 6.4% and 4.9% of the investment portfolio’s amortized cost and fair value, respectively. As ofDecember 31, 2022 , we had debt investments in one portfolio company on non-accrual status with an aggregate amortized cost and fair value of$11.9 million and$9.7 million , respectively, representing 5.4% and 4.8% of the investment portfolio’s amortized cost and fair value, respectively. - Our asset coverage ratio as of
March 31, 2023 was 175%.
Results of Operations
Operating results for the quarters ended
For the Three Months Ended |
||||||||
2023 | 2022 | |||||||
Total investment income | $ | 5,256 | $ | 3,337 | ||||
Total expenses | 4,183 | 4,388 | ||||||
Net investment income (loss) | 1,073 | (1,051 | ) | |||||
Net realized loss on investments | (1,506 | ) | (36 | ) | ||||
Net change in unrealized (depreciation) appreciation on investments | (217 | ) | 229 | |||||
Net decrease in net assets resulting from operations | $ | (650 | ) | $ | (858 | ) |
Investment income
The composition of our investment income for the three months ended
For the Three Months Ended |
||||||||
2023 | 2022 | |||||||
Interest income | $ | 4,768 | $ | 3,197 | ||||
Payment-in-kind interest | 464 | 132 | ||||||
Dividend income | 14 | — | ||||||
Other income | 10 | 8 | ||||||
Total investment income | $ | 5,256 | $ | 3,337 |
Fair Value of Investments
The composition of our investments as of
As of |
Investments at Amortized Cost |
Amortized Cost Percentage of Total Portfolio |
Investments at Fair Value |
Fair Value Percentage of Total Portfolio |
||||||||||||
First Lien Debt | $ | 144,304 | 65.4 | % | $ | 137,563 | 67.7 | % | ||||||||
Second Lien Debt | 8,444 | 3.8 | % | 6,775 | 3.3 | % | ||||||||||
Subordinated Debt | 26,573 | 12.1 | % | 24,696 | 12.1 | % | ||||||||||
Collateralized Loan Obligations | 4,622 | 2.1 | % | 4,207 | 2.1 | % | ||||||||||
Joint Venture | 470 | 0.2 | % | 456 | 0.2 | % | ||||||||||
Equity | 36,065 | 16.4 | % | 29,640 | 14.6 | % | ||||||||||
Total | $ | 220,478 | 100.0 | % | $ | 203,337 | 100.0 | % |
As of |
Investments at Amortized Cost |
Amortized Cost Percentage of Total Portfolio |
Investments at Fair Value |
Fair Value Percentage of Total Portfolio |
||||||||||||
First Lien Debt | $ | 143,047 | 64.9 | % | $ | 136,896 | 67.3 | % | ||||||||
Second Lien Debt | 8,283 | 3.8 | % | 6,464 | 3.2 | % | ||||||||||
Subordinated Debt | 26,571 | 12.0 | % | 25,851 | 12.7 | % | ||||||||||
Collateralized Loan Obligations | 6,185 | 2.8 | % | 4,972 | 2.4 | % | ||||||||||
Joint Venture | 414 | 0.2 | % | 403 | 0.2 | % | ||||||||||
Equity | 36,016 | 16.3 | % | 29,006 | 14.2 | % | ||||||||||
Total | $ | 220,516 | 100.0 | % | $ | 203,592 | 100.0 | % |
Interest Rate Risk
Based on our
Basis Point Change | Increase (decrease) in interest income |
(Increase) decrease in interest expense |
Increase (decrease) in net income |
||||||
Up 300 basis points | $ | 4,493 | $ | (1,776 | ) | $ | 2,717 | ||
Up 200 basis points | 2,995 | (1,184 | ) | 1,811 | |||||
Up 100 basis points | 1,498 | (592 | ) | 906 | |||||
Down 100 basis points | (1,498 | ) | 592 | (906 | ) | ||||
Down 200 basis points | (2,977 | ) | 1,184 | (1,793 | ) | ||||
Down 300 basis points | $ | (4,372 | ) | $ | 1,776 | $ | (2,596 | ) |
Conference Call and Webcast
We will hold a conference call on
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 5295745. A replay of the conference call will be available from approximately
A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on our 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/26khk7wn. The online archive of the webcast will be available on the Company’s website shortly after the call.
About
About Mount Logan Capital Inc.
Mount Logan Capital Inc. is an alternative asset management company that is focused on public and private debt securities in the North American market. The Company seeks to source and actively manage loans and other debt-like securities with credit-oriented characteristics. The Company 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 Credit was launched in
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
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:
Chief Financial Officer
Jason.Roos@bcpartners.com
(212) 891-5046
lcati@equityny.com
(212) 836-9611
vferraro@equityny.com
(212) 836-9633
Consolidated Statements of Assets and Liabilities | ||||||||
(in thousands, except share and per share data) | ||||||||
As of 2023 |
As of 2022 |
|||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investments at fair value: | ||||||||
Non-control/non-affiliate investments (amortized cost of |
$ | 176,832 | $ | 177,268 | ||||
Affiliate investments (amortized cost of |
26,505 | 26,324 | ||||||
Total investments at fair value (amortized cost of |
203,337 | 203,592 | ||||||
Cash and cash equivalents | 9,347 | 6,793 | ||||||
Interest and dividend receivable | 1,209 | 1,578 | ||||||
Prepaid expenses | 2,514 | 2,682 | ||||||
Other assets | 62 | 65 | ||||||
Total assets | $ | 216,469 | $ | 214,710 | ||||
LIABILITIES | ||||||||
2026 Notes (net of deferred financing costs and original issue discount of |
48,667 | 48,579 | ||||||
2032 Convertible Notes (net of deferred financing costs and original issue discount of |
13,912 | 13,883 | ||||||
KeyBank Credit Facility (net of deferred financing costs of |
57,140 | 54,615 | ||||||
Management and incentive fees payable | 932 | 933 | ||||||
Interest and financing fees payable | 1,469 | 973 | ||||||
Accounts payable and accrued expenses | 516 | 722 | ||||||
Total liabilities | $ | 122,636 | $ | 119,705 | ||||
Commitments and contingencies | ||||||||
NET ASSETS | ||||||||
Common stock, par value |
$ | 27 | $ | 27 | ||||
Additional paid in capital | 191,007 | 191,038 | ||||||
Total distributable loss | (97,201 | ) | (96,060 | ) | ||||
Total net assets | $ | 93,833 | $ | 95,005 | ||||
Total liabilities and net assets | $ | 216,469 | $ | 214,710 | ||||
Net asset value per share | $ | 34.63 | $ | 35.04 |
Consolidated Statements of Operations | ||||||||
(in thousands, except share and per share data) | ||||||||
For the Three Months Ended |
||||||||
2023 | 2022 | |||||||
INVESTMENT INCOME | ||||||||
Interest income: | ||||||||
Non-control/non-affiliate investments | $ | 4,604 | $ | 2,383 | ||||
Affiliate investments | 164 | 719 | ||||||
Control investments | — | 95 | ||||||
Total interest income | 4,768 | 3,197 | ||||||
Payment-in-kind interest and dividend income: | ||||||||
Non-control/non-affiliate investments | 416 | (1) | 85 | |||||
Affiliate investments | 48 | 47 | ||||||
Total payment-in-kind interest and dividend income | 464 | 132 | ||||||
Dividend income: | ||||||||
Non-control/non-affiliate investments | — | — | ||||||
Affiliate investments | 14 | — | ||||||
Total dividend income | 14 | — | ||||||
Other income: | ||||||||
Non-control/non-affiliate investments | 10 | — | ||||||
Affiliate investments | — | 8 | ||||||
Total other income | 10 | 8 | ||||||
Total investment income | 5,256 | 3,337 | ||||||
EXPENSES | ||||||||
Interest and financing expenses | 2,069 | 2,188 | ||||||
Base management fee | 930 | 1,027 | ||||||
Directors' expense | 135 | 103 | ||||||
Administrative service fees | 257 | 120 | ||||||
General and administrative expenses | 792 | 950 | ||||||
Total expenses | 4,183 | 4,388 | ||||||
NET INVESTMENT INCOME (LOSS) | 1,073 | (1,051 | ) | |||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||
Net realized (loss) gain on investments: | ||||||||
Non-control/non-affiliate investments | (1,506 | ) | (36 | ) | ||||
Net realized (loss) gain on investments | (1,506 | ) | (36 | ) | ||||
Net change in unrealized (depreciation) appreciation on investments: | ||||||||
Non-control/non-affiliate investments | (1,250 | ) | (1,150 | ) | ||||
Affiliate investments | 1,033 | 1,303 | ||||||
Control investments | — | 76 | ||||||
Net change in unrealized (depreciation) appreciation on investments | (217 | ) | 229 | |||||
Total net realized and change in unrealized (loss) gain on investments | (1,723 | ) | 193 | |||||
$ | (650 | ) | $ | (858 | ) | |||
FROM OPERATIONS – BASIC & DILUTED |
$ | (0.24 | ) | $ | (0.32 | ) | ||
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC & DILUTED |
2,710,990 | 2,711,068 | ||||||
DISTRIBUTIONS PAID PER SHARE | $ | 0.18 | $ | — |
(1) During the period ended

Source: Logan Ridge Finance Corporation