Wall Street’s main benchmarks rose sharply in pre-market trading Tuesday after the Russian Defense Ministry said some military units will start returning to their permanent bases after completing drills near the Ukrainian border.
Futures tied to the S&P 500 jumped 1.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or 69 points, to 4,463.00, while Dow Jones Industrial Average futures were up 1.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or 401 points to 34,872.00. Contracts on the Nasdaq Composite steeply advanced 2.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or 317.50 points, to 14,570.50 after the escalating threat of Russian military action against Ukraine had weighed on markets in recent days as investors already grapple with the prospect of swifter monetary tightening by the Federal Reserve.
Meanwhile, oil retreated from its highest price since 2014, falling 3.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $91.87 per barrel.
Fears that the Kremlin will green light a move to force in on Ukraine as soon as this week have created a new headwind for global markets worried the conflict could exacerbate inflation and spur other economic disruptions. The Wall Street Journal reported on Monday the U.S. was closing its embassy in Kyiv and destroying networking and computer equipment as a Russian military attack becomes increasingly imminent.
“The escalation of Russia and Ukraine tensions come at a time when the stock market is already vulnerable given inflation worries and the potential for Federal Reserve tightening,” Sanders Morris Harris Chairman George Ball said in a note. “If an armed conflict between Russia and Ukraine is somehow avoided, a short-lived relief rally is likely, but there are still too many worries on the horizon for any type of longer lasting upward move higher in stocks.”
The geopolitical tensions add to the uncertainty around central bank policy that has dominated market sentiment in recent months. Last week, the Labor Department reported the Consumer Price Index (CPI) notched a steeper-than-expected 7.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase over the year ended January to mark the largest annual jump since 1982.
The surge heightened calls for the Federal Reserve to intervene more aggressively than anticipated to rein in soaring price levels, even raising the possibility of an emergency hike before the bank’s next policy meeting in March.
“You have everything laid out perfectly for the market to go lower,” he said, pointing to higher interest rates, slow earnings, and slow economic growth around the globe. “There’s no good reason to see this market go higher.”
Comerica Wealth Management Chief Investment Officer John Lynch pointed out in a note that despite recent volatility in interest rates and equities, areas of the fixed-income markets have exhibited less turbulence. With corporate credit stress limited for investment grade and high-yield bonds, 10-year breakeven inflation expectations remain contained.
“We believe it is important for investors to focus on market signals, rather than headlines, while also respecting traditional patterns for prices, interest rates, and equity valuations,” Lynch said.
Although earnings season is slowly winding down, investors will tune in this week for another docket of corporate results to weigh against monetary and geopolitical conditions.
Investors can expect reports from companies including Walmart (WMT), Marriott International (MAR), ViacomCBS (VIAC), and Airbnb (ABNB) on Tuesday. On the economic front, a fresh read on the Producer Price Index for January and retail sales are due out before open to serve as another inflation snapshot for markets.
—
7:00 a.m. ET: Contracts on S&P, Dow, and Nasdaq surge after Russia pulls back troops
Here were the main moves on Wall Street in pre-market trading Tuesday:
S&P 500 (^GSPC): +66.50 (+1.51{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,460.50
Dow (^DJI): +399.00 (+1.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,870.00
Nasdaq (^IXIC): +296.75 (+2.08{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,549.75
Crude (CL=F): -$3.37 (-3.53{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $92.09 a barrel
Gold (GC=F): -$17.00 (-0.91{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,852.40 per ounce
10-year Treasury (^TNX): +4.1 bps to yield 1.9960{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
—
6:02 p.m. ET Wednesday: Futures open flat after Russia-Ukraine tensions weigh on earlier session
Here were the main moves in markets ahead of overnight trading Wednesday:
S&P 500 (^GSPC): +3.25 (+0.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,397.25
Dow (^DJI): +6.00 (+0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,477.00
Nasdaq (^IXIC): +16.75 (+0.12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,269.75
Crude (CL=F): -$0.74 (-0.78{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $94.72 a barrel
Gold (GC=F): +$3.80 (+0.20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,873.20 per ounce
10-year Treasury (^TNX): +4.1 bps to yield 1.9960{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
A general view shows a Wall Street sign outside the New York Stock Exchange (NYSE) in New York, New York on January 24, 2022. (Photo by Ed JONES / AFP) (Photo by ED JONES/AFP via Getty Images)
—
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Read the latest financial and business news from Yahoo Finance
Continued Operating Momentum, with Revenues Up 9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Sequentially and 44{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Year-over-Year
Signed Multi-Million-Dollar Contract Renewal with Major U.S. Multiple-System-Operator
Re-alignment in Progress, with Continued Execution on Core Competencies in Video & Advertising, Shifting More Resources to Streaming Products
BOSTON, Dec. 14, 2021 (GLOBE NEWSWIRE) — SeaChange International, Inc. (NASDAQ: SEAC), a leading provider of video delivery, advertising, and emerging streaming platforms, today reported financial and operational results for the fiscal third quarter ended October 31, 2021.
Fiscal Third Quarter 2022 and Recent Highlights
Secured multi-million-dollar contract renewal with one of the largest multiple-system-operators in the United States, demonstrating ability to successfully monetize long-term relationships.
Appointed veteran TMT executive Peter D. Aquino as President and CEO, solidifying senior leadership team, and initiating strategic initiatives.
Generated 9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} sequential revenue growth and 44{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year, driven primarily by signed renewals, and upsells from existing customers.
Decreased operating expenses by 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} sequentially substantially due to ongoing efficiency measures and approaching break-even and company profitability objectives.
Ended quarter with solid balance sheet, including $17.6 million in cash and cash equivalents and no debt.
Management Commentary
“Our financial results in the third quarter demonstrate our continued commitment to our multi-pronged strategy towards revenue growth, increased profitability, and strategic objectives,” said SeaChange’s President and Chief Executive Officer, Peter D. Aquino. “My first 90 days included a deep dive into the operations, management objectives, and growth products that we are ‘leaning’ into to accelerate our transformation and provide customers with leading-edge software to drive their streaming services. I am very excited about our upside to play a leading role in enabling our customers to capture this new demand.”
Chris Klimmer, Senior Vice President and Chief Revenue Officer at SeaChange, commented: “SeaChange operates in massive markets with large and growing total addressable markets (TAMs) where we are leveraging our deep expertise, strong relationships and long operating history to capitalize on these opportunities. Our pipeline is growing, and we are encouraged by the progress we are making in each of our core operating markets. We are effectively monetizing longstanding Tier 1 relationships in cable, transitioning companies to high-upside revenue sharing models in advertising, creating new offerings through our streaming platform StreamVid, as well as introducing new innovations to support content monetization on Connected TV platforms through FAST channels, a product initiative that we branded Xstream.”
Aquino added: “SeaChange is in an increasingly strong operating position with $17.6 million in cash and no debt, a lean cost structure and growing revenue. My thorough assessment of our business not only reaffirmed but strengthened my belief that our company’s technology platform has significant value, which we are seeking to maximize through both organic and inorganic growth opportunities. Longer term, we believe our continued execution on our strategic plan will drive scale, capture market share, and create even greater value for both our customers and stockholders.”
Fiscal Third Quarter 2022 Financial Results
Total revenue was $7.2 million, compared to $6.5 million in the second quarter of fiscal 2022. Product revenue was $3.5 million (or 49{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of total revenue), an improvement compared to $2.7 million (or 41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of total revenue) in the second quarter of fiscal 2022. Service revenue was $3.6 million (or 51{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of total revenue) compared to $3.8 million (or 59{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of total revenue) in the second quarter of fiscal 2022.
Gross profit was $3.7 million (or 52{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of total revenue), compared to $4.1 million (or 63{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of total revenue) in the second quarter of fiscal 2022.
Total non-GAAP operating expenses were $5.1 million, an improvement compared to non-GAAP operating expenses of $5.4 million in the second quarter of fiscal 2022.
GAAP loss from operations totaled $2.0 million, an improvement compared to a GAAP loss from operations of $2.5 million in the second quarter of fiscal 2022.
GAAP net loss totaled $2.1 million, or $(0.04) per basic share, a decrease from GAAP net income of $0.2 million, or $0.00 per fully diluted share, in the second quarter of fiscal 2022.
Non-GAAP loss from operations totaled $1.4 million, or $(0.03) per basic share, compared to non-GAAP loss from operations of $1.3 million, or $(0.03) per basic share, in the second quarter of fiscal 2022.
Ended the quarter with cash and cash equivalents of $17.6 million and no debt.
Conference Call SeaChange will host a conference call today (December 14, 2021) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these results.
SeaChange executive management will host the call, followed by a question-and-answer period.
U.S. dial-in number: 877-407-8037 International number: 201-689-8037 Meeting Number: 13725442
Please call the conference telephone number approximately 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of SeaChange’s website.
About SeaChange International, Inc. SeaChange International (NASDAQ: SEAC) is a trusted provider of streaming video services, cable TV broadcast platforms and advanced advertising insertion technology. The company partners with operators, broadcasters and content owners worldwide to help them deliver the highest quality video experience to consumers. Its StreamVid premium streaming platform enables operators and content owners to cost-effectively launch and grow a direct-to-consumer service to manage, curate and monetize their content as well as form a direct relationship with their subscribers. SeaChange enjoys a rich heritage of nearly three decades of video hardware, software and advertising technology.
Safe Harbor Provision Certain statements in this press release may constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended to date. Forward-looking statements can be identified by words such as “may,” “might,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “seeks,” “intends,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. Examples of forward-looking statements include, among others, statements we make regarding the Company’s ability to grow its revenue pipeline, execute its strategic plan and the benefits of its strategic plan, including driving scale, capturing market share, and creating even greater value for both our customers and stockholders; and other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations, and assumptions of the management of the Company and are subject to a number of known and unknown risks and significant business, economic and competitive uncertainties that could cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. Risks that could cause actual results to differ include, but are not limited to: the impact of COVID-19 on our business and the economies in which we operate; the continued spending by the Company’s customers on video solutions and services and expenses we may incur in fulfilling customer arrangements; the manner in which the multiscreen video and over-the-top markets develop; the Company’s ability to compete in the software marketplace; the loss of or reduction in demand, or the return of product, by one of the Company’s large customers or the failure of revenue acceptance criteria in a given fiscal quarter; the cancellation or deferral of purchases of the Company’s products; any decline in demand or average selling prices for our products and services; failure to achieve our financial forecasts due to inaccurate sales forecasts or other factors, including due to expenses we may incur in fulfilling customer arrangements; the impact of our cost-savings and restructuring programs; the Company’s ability to manage its growth; the risks associated with international operations; the ability of the Company to use its net operating losses, including the potential impact on these losses resulting from the Coronavirus Aid, Relief, and Economic Security (CARES) Act; the impact of changes in the market on the value of our investments; changes in the regulatory environment; and other risks that are described in further detail in the Company’s reports filed from time to time with the Securities and Exchange Commission (SEC), which are available at the SEC’s website at http://www.sec.gov, including but not limited to, such information appearing under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K. Any forward-looking statements should be considered in light of those risk factors. The Company cautions readers that such forward-looking statements speak only as of the date they are made. The Company disclaims any intent or obligation to publicly update or revise any such forward-looking statements to reflect any change in Company expectations or future events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results may differ from those set forth in such forward-looking statements.
SeaChange Contact: Matt Glover and Jeff Grampp, CFA Gateway Group, Inc. 949-574-3860 SEAC@gatewayir.com
SeaChange International, Inc. Condensed Consolidated Balance Sheets (Unaudited, amounts in thousands)
October 31, 2021
January 31, 2021
Assets
Cash and cash equivalents
$
17,551
$
5,856
Marketable securities
—
252
Accounts and other receivables, net
5,374
6,050
Unbilled receivables
15,146
15,699
Prepaid expenses and other current assets
2,553
4,372
Property and equipment, net
512
605
Goodwill and intangible assets, net
10,479
11,849
Other assets
2,900
5,725
Total assets
$
54,515
$
50,408
Liabilities and Stockholders’ Equity
Accounts payable and other liabilities
$
6,861
$
10,172
Deferred revenue
3,009
5,394
Deferred tax liabilities and income taxes payable
784
888
Promissory note
—
2,413
Total liabilities
10,654
18,867
Total stockholders’ equity
43,861
31,541
Total liabilities and stockholders’ equity
$
54,515
$
50,408
SeaChange International, Inc. Consolidated Statements of Operations (Unaudited, amounts in thousands, except per share data)
For the Three Months Ended October 31,
For the Nine Months Ended October 31,
2021
2020
2021
2020
Revenue:
Product
$
3,511
$
1,048
$
7,840
$
5,212
Service
3,640
3,918
10,903
11,664
Total revenue
7,151
4,966
18,743
16,876
Cost of revenue:
Product
1,609
435
2,708
2,803
Service
1,830
1,755
5,375
6,974
Total cost of revenue
3,439
2,190
8,083
9,777
Gross profit
3,712
2,776
10,660
7,099
Operating expenses:
Research and development
2,090
3,024
6,971
10,550
Selling and marketing
1,449
1,636
4,472
5,490
General and administrative
2,110
2,636
6,897
7,057
Severance and restructuring costs
75
53
646
1,082
Total operating expenses
5,724
7,349
18,986
24,179
Loss from operations
(2,012
)
(4,573
)
(8,326
)
(17,080
)
Other expense, net
(67
)
(499
)
(83
)
(334
)
Gain on extinguishment of debt
—
—
2,440
—
Loss before income taxes
(2,079
)
(5,072
)
(5,969
)
(17,414
)
Income tax provision (benefit)
26
45
(23
)
(21
)
Net loss
$
(2,105
)
$
(5,117
)
$
(5,946
)
$
(17,393
)
Net loss per share, basic
$
(0.04
)
$
(0.14
)
$
(0.13
)
$
(0.46
)
Net loss per share, diluted
$
(0.04
)
$
(0.14
)
$
(0.13
)
$
(0.46
)
Weighted average common shares outstanding, basic
49,040
37,556
46,334
37,436
Weighted average common shares outstanding, diluted
49,040
37,556
46,334
37,436
Comprehensive loss:
Net loss
$
(2,105
)
$
(5,117
)
$
(5,946
)
$
(17,393
)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment
(291
)
(143
)
(649
)
1,498
Unrealized (losses) gains on marketable securities
—
(33
)
1
(37
)
Total other comprehensive (loss) income
(291
)
(176
)
(648
)
1,461
Comprehensive loss
$
(2,396
)
$
(5,293
)
$
(6,594
)
$
(15,932
)
SeaChange International, Inc. Consolidated Statements of Cash Flows (Unaudited, amounts in thousands)
For the Nine Months Ended October 31,
2021
2020
Cash flows from operating activities:
Net loss
$
(5,946
)
$
(17,393
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense
1,098
1,105
Loss on disposal of fixed assets
75
—
Gain on write-off of operating lease right-of-use assets and liabilities related to termination
(328
)
—
Gain on extinguishment of debt
(2,440
)
—
Recovery of bad debts
(135
)
(216
)
Stock-based compensation expense
1,315
1,054
Deferred income taxes
—
246
Realized and unrealized foreign currency transaction loss
399
1,498
Other
1
(26
)
Changes in operating assets and liabilities:
Accounts receivable
709
7,084
Unbilled receivables
397
4,274
Prepaid expenses and other current assets and other assets
2,007
539
Accounts payable
(93
)
(1,242
)
Accrued expenses and other liabilities
(230
)
(3,886
)
Deferred revenue
(2,329
)
(2,358
)
Net cash used in operating activities
(5,500
)
(9,321
)
Cash flows from investing activities:
Purchases of property and equipment
(78
)
(311
)
Proceeds from sales and maturities of marketable securities
252
3,576
Net cash provided by investing activities
174
3,265
Cash flows from financing activities:
Proceeds from stock option exercises
137
119
Proceeds from employee stock purchase plan
—
18
Proceeds from issuance of common stock, net of issuance costs
17,462
—
Repurchases of common stock
—
(80
)
Proceeds from the Paycheck Protection Program
—
2,413
Net cash provided by financing activities
17,599
2,470
Effect of exchange rate on cash, cash equivalents and restricted cash
(467
)
(587
)
Net increase (decrease) in cash, cash equivalents and restricted cash
11,806
(4,173
)
Cash, cash equivalents and restricted cash at beginning of period
6,084
9,297
Cash, cash equivalents and restricted cash at end of period
$
17,890
$
5,124
Supplemental disclosure of cash flow information
Income taxes paid
$
132
$
196
Non-cash activities:
Right-of-use assets obtained in exchange for lease obligations
$
—
$
987
Purchases of property and equipment included in accounts payable
$
72
$
—
Non-GAAP Measures We define non-GAAP loss from operations as U.S. GAAP net loss plus stock-based compensation expenses, amortization of intangible assets, severance and restructuring costs, gain on extinguishment of debt, other expense, net, and income tax (provision) benefit. We discuss non-GAAP loss from operations, including on a per share basis, in our quarterly earnings releases and certain other communications, as we believe non-GAAP operating loss from operations is an important measure that is not calculated according to U.S. GAAP. We use non-GAAP loss from operations in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our Board of Directors, determining a component of bonus compensation for executive officers and other key employees based on operating performance, and evaluating short-term and long-term operating trends in our operations. We believe that the non-GAAP loss from operations financial measure assists in providing an enhanced understanding of our underlying operational measures to manage the business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. We believe that the non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in our financial and operational decision-making.
Non-GAAP loss from operations is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the financial adjustments described above in arriving at non-GAAP loss from operations and investors should not infer from our presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring. The following table includes the reconciliations of our U.S. GAAP loss from operations, the most directly comparable U.S. GAAP financial measure, to our non-GAAP loss from operations for the three and nine months ended October 31, 2021.
SeaChange International, Inc. Fiscal Year Reconciliation of GAAP to Non-GAAP (Unaudited, amounts in thousands, except per share data)
For the Three Months Ended October 31,
For the Nine Months Ended October 31,
2021
2020
2021
2020
(Amounts in thousands)
(Amounts in thousands)
GAAP net loss
$
(2,105
)
$
(5,117
)
$
(5,946
)
$
(17,393
)
Other expense, net
(67
)
(499
)
(83
)
(334
)
Gain on extinguishment of debt
—
—
2,440
—
Income tax (provision) benefit
(26
)
(45
)
23
21
GAAP loss from operations
$
(2,012
)
$
(4,573
)
$
(8,326
)
$
(17,080
)
Amortization of intangible assets
304
308
930
891
Stock-based compensation
274
437
1,315
1,054
Severance and restructuring costs
75
53
646
1,082
Non-GAAP loss from operations
$
(1,359
)
$
(3,775
)
$
(5,435
)
$
(14,053
)
Non-GAAP loss from operations, basic per share
(0.03
)
(0.10
)
(0.12
)
(0.38
)
Non-GAAP loss from operations, diluted per share
(0.03
)
(0.10
)
(0.12
)
(0.38
)
Weighted average common shares outstanding, basic per share
49,040
37,556
46,334
37,436
Weighted average common shares outstanding, diluted per share
49,040
37,556
46,334
37,436
SeaChange International, Inc. Supplemental Schedule – Revenue Breakout (Unaudited, amounts in thousands)
NEW YORK, Nov. 04, 2021 (GLOBE NEWSWIRE) — Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “Portman Ridge”) announced today its financial results for the third quarter ended September 30, 2021 and declared a quarterly stockholder distribution of $0.62 per share for the fourth quarter of 2021, payable on November 30, 2021 to stockholders of record at the close of business on November 15, 2021. This is an increase of $0.02 per share from $0.60 per share last quarter.
Third Quarter 2021 Highlights
Completed a 1-for-10 reverse stock split of the Company’s common stock effective August 26, 2021.
Net investment income for the quarter was $1.50 per share, or $13.7 million.
Net asset value (“NAV”) per share increased to $29.71 from $29.28(2) quarter-to-quarter, reflecting broad-based improvements in the debt portfolio and joint ventures.
As of September 30, 2021, the fair value of the Company’s investments excluding derivatives totaled $562 million, of which the Company’s debt securities portfolio totaled $455 million and was comprised of investments in 145 portfolio companies.
During the quarter, the Company acquired approximately $62.0million par value of investment portfolio assets. Also, during the quarter, the Company received approximately $37.1 million in sale and repayment proceeds, which includes a $0.5 million increase relative to the carrying value of those assets sold.
Net leverage(1) was 1.1x as of September 30, 2021, compared to 0.9x as of June 30, 2021, driven primarily by the timing of investments in the pipeline. During the quarter, the Company redeemed in full the aggregate amount outstanding of $28.75 million of the HCAP 6.125{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes due 2022.
Under its share buyback program, the Company repurchased approximately $1.4 million of its shares during the quarter.
The quarterly distribution for the third quarter was $0.60 per share and was paid on August 31, 2021.
Subsequent to quarter-end, on October 22, 2021, the Company entered into a purchase and sale agreement to purchase $18.1 million of portfolio assets from two wholly-owned subsidiaries of JMP Group LLC in exchange for $1.4 million in cash and 556,852 shares of its common stock issued at NAV. The closing of the transaction occurred in the fourth quarter of 2021.
Management Commentary
Ted Goldthorpe, Chief Executive Officer of Portman Ridge commented, “Our third quarter results reflect continued strong earnings, distribution coverage, and robust origination. Net assets per share increased to $29.71 and represents the sixth straight quarter-to-quarter increase. We also continued to maintain expenses at a stable level relative to our asset base, which has grown significantly over the past year, and we expect further leveraging of operating expenses over time. Our solid performance has allowed us to increase our quarterly distribution this by $0.02 to $0.62 per share. Overall, our objective is to deliver consistently strong performance each quarter for shareholders, and we believe we are well positioned to continue executing on this goal.”
Selected Financial Highlights (unaudited)
Three Months Ended
Three Months Ended
(in $ millions, except per share data)
September 30, 2021
June 30, 2021
Investment Income:
Interest from investments in debt securities
$
18.7
$
18.0
Investment income on CLO Fund Securities
0.7
0.8
Investment income – Joint Ventures
2.4
2.5
Capital structuring service fees
1.0
0.2
Total investment income
22.9
21.5
Net expenses
9.2
9.8
Net Investment Income
$
13.7
$
11.7
Net realized and unrealized gains (losses)
(4.6
)
(0.9
)
Realized losses on debt extinguishment
‒
‒
Net increase in net assets resulting from operations
$
9.1
$
10.8
Net increase in net assets resulting from operations per share (basic and diluted)(2)
$
1.00
$
1.40
Net investment income per share (basic and diluted)(2)
$
1.50
$
1.51
Weighted average shares outstanding (in millions)(2)
9.1
7.7
Distribution per share
$
0.60
$
0.60
Total investment income for the three months ended September 30, 2021 and June 30, 2021 was $22.9 million and $21.5 million, respectively. Investment income increased quarter-to-quarter primarily due to higher interest income on debt securities and higher capital structuring fees.
Total expenses for the three months ended September 30, 2021 and June 30, 2021 were $9.2 million and $9.8 million, respectively. The decrease quarter-to-quarter was driven primarily by lower incentive fees, lower professional fees, and lower general and administrative expenses. Interest expense and amortization of debt issuance costs decreased slightly quarter-to-quarter, from $3.5 million to $3.4 million due to the impact of a lower weighted average cost of debt.
Net investment income for the three months ended September 30, 2021 and June 30, 2021 was $13.7 million or $1.50 per share, and $11.7 million or $1.51(2) per share, respectively.
Net realized and unrealized depreciation on investments for the three months ended September 30, 2021 was $(4.6) million, as compared to net realized and unrealized appreciation of $(0.9) million for the three months ended June 30, 2021.
Portfolio
The fair value of our portfolio was $560 million ($562 million excluding derivatives) as of September 30, 2021. The composition of our investment portfolio at September 30, 2021 and December 31, 2020 at cost and fair value was as follows:
¹ Represents percentage of total portfolio at fair value. ² Represents the equity investment in the Asset Manager Affiliates.
As of September 30, 2021, six of the Company’s debt investments were on non-accrual status. As of June 30, 2021, eight of the Company’s investments were on non-accrual status. Investments on non-accrual status were 0.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s investment portfolio at fair value and amortized cost as of September 30, 2021, respectively, compared to 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 3.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as of June 30, 2021.
Liquidity and Capital Resources
As of September 30, 2021, we had $340.9 million (par value) of borrowings outstanding ($335.4 million net of capitalized costs) with a combined weighted average interest rate of 3.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. This balance was comprised of $69.1 million of outstanding borrowings under the Senior Secured Revolving Credit Facility, $163.9 million of 2018-2 Secured Notes due 2029, and $108.0 million of 4.875{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes due 2026.
As of September 30, 2021, the Company had unrestricted cash of $28.5 million, restricted cash of $21.1 million, $45.9 million of available borrowing capacity under the Senior Secured Revolving Credit Facility, and $25.0 million of borrowing capacity under the 2018-2 Revolving Credit Facility. Total assets and stockholders’ equity at September 30, 2021 were $627 million and $271 million, respectively. Aggregate unfunded commitments stood at $48.7 million as of September 30, 2021. Conference Call and Webcast
We will hold a conference call on Friday November 5, 2021 at 11:00 a.m. Eastern Time to discuss our third quarter 2021 financial results. Stockholders, prospective stockholders and analysts are welcome to listen to the call or attend the webcast.
To access the call please dial (866) 757-5630 approximately 10 minutes prior to the start of the conference call and reference the conference ID 7445538. A replay of the conference call will be available from November 5, 2021 until November 12, 2021. The dial in number for the replay is (855) 859-2056 and the conference ID is 7445538.
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.portmanridge.com in the Investor Relations section under Events and Presentations. The webcast can also be accessed by clicking the following link: Portman Ridge Third Quarter 2021 Conference Call. The online archive of the webcast will be available on the Company’s website shortly after the call.
About Portman Ridge Finance Corporation
Portman Ridge Finance Corporation (Nasdaq: PTMN) is a publicly traded, externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Portman Ridge’s middle market investment business originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. Portman Ridge’s investment activities are managed by its investment adviser, Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors, LP.
Portman Ridge’s filings with the Securities and Exchange Commission (the “SEC”), earnings releases, press releases and other financial, operational and governance information are available on the Company’s website at www.portmanridge.com.
About BC Partners Advisors L.P. and BC Partners Credit
BC Partners is a leading international investment firm with over $40 billion of assets under management 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. Since inception, BC Partners has completed 117 private equity investments in companies with a total enterprise value of €149 billion and is currently investing its eleventh private equity fund. 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.
This press release contains forward-looking statements. The matters discussed in this press release, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.
Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments and the future liquidity of the Company. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook”, “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. 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.
Important assumptions include our ability to originate new investments, and achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation that such plans, estimates, expectations or objectives will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) uncertainty of the expected financial performance of the Company; (2) expected synergies and savings associated with the transaction in which Garrison Capital Inc. merged with and into the Company; (3) the ability of the Company and/or BC Partners to implement its business strategy; (4) evolving legal, regulatory and tax regimes; (5) changes in general economic and/or industry specific conditions; (6) the impact of increased competition; (7) business prospects and the prospects of the Company’s portfolio companies; (8) contractual arrangements with third parties; (9) any future financings by the Company; (10) the ability of Sierra Crest Investment Management LLC to attract and retain highly talented professionals; (11) the Company ability to fund any unfunded commitments; (12) any future distributions by the Company; (13) changes in regional or national economic conditions, including but not limited to the impact of the COVID-19 pandemic, and their impact on the industries in which we invest; (14) other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the SEC; and (15) expected synergies and savings associated with the transaction in which HCAP merged with and into the Company. The forward-looking statements should be read in conjunction with the risks and uncertainties discussed in the Company’s filings with the SEC, including the Company’s most recent Form 10-K and other SEC filings. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the SEC.
(1) Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and cash equivalents, and restricted cash and (B) NAV. (2) The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, share and per share amounts have been adjusted retroactively to reflect the split for all periods presented.
Contacts: Portman Ridge Finance Corporation 650 Madison Avenue, 23rd floor New York, NY 10022 info@portmanridge.com
Jason Roos Jason.Roos@bcpartners.com (212) 891-2880
Jeehae Linford The Equity Group Inc. jlinford@equityny.com (212) 836-9615
Accounts payable, accrued expenses and other liabilities
3,961,666
1,788,908
Accrued interest payable
3,345,558
1,089,531
Due to affiliates
760,112
1,374,739
Management and incentive fees payable
5,654,814
5,243,869
Total Liabilities
356,056,136
383,914,558
COMMITMENTS AND CONTINGENCIES (NOTE 8)
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share, 20,000,000 common shares authorized; 9,291,578 issued, and 9,123,275 outstanding at September 30, 2021, and 7,609,349 issued, and 7,516,423 outstanding at December 31, 2020
91,233
75,164
Capital in excess of par value
680,451,474
639,136,026
Total distributable (loss) earnings
(409,494,432
)
(422,947,327
)
Total Stockholders’ Equity
271,048,275
216,263,863
Total Liabilities and Stockholders’ Equity
$
627,104,411
$
600,178,421
NET ASSET VALUE PER COMMON SHARE (1)
$
29.71
$
28.77
(1) The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, the common shares and net asset value per common share have been adjusted retroactively to reflect the split for all periods presented.
PORTMAN RIDGE FINANCE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2021
2020
2021
2020
Investment income:
Interest from investments in debt securities
$
17,391,146
$
4,517,268
$
48,736,532
$
13,910,567
Payment-in-kind investment income
1,296,496
434,446
3,172,910
1,125,343
Interest from cash and time deposits
–
–
–
15,279
Investment income on CLO Fund Securities managed by affiliates
–
587,239
–
2,493,600
Investment income on CLO Fund Securities managed by non-affiliates
748,449
42,341
2,211,092
247,302
Investment income – Joint Ventures
2,442,703
2,182,466
7,012,167
4,760,485
Capital structuring service fees
1,032,346
23,602
1,628,155
302,887
Total investment income
22,911,140
7,787,362
62,760,856
22,855,463
Expenses:
Management fees
2,064,733
1,043,645
5,771,636
3,063,719
Performance-based incentive fees
1,939,170
571,846
6,332,646
1,128,726
Interest and amortization of debt issuance costs
3,408,445
2,239,911
10,315,528
6,984,852
Professional fees
490,284
439,503
2,680,458
1,810,450
Insurance
198,011
177,154
574,973
478,058
Administrative services expense
760,112
470,435
2,091,769
1,361,700
Other general and administrative expenses
332,534
147,818
1,352,737
522,091
Total expenses
9,193,289
5,090,312
29,119,747
15,349,596
Management and performance-based incentive fees waived
—
(556,880
)
Net Expenses
9,193,289
5,090,312
29,119,747
14,792,716
Net Investment Income
13,717,851
2,697,050
33,641,109
8,062,747
Realized And Unrealized Gains (Losses) On Investments:
Net realized (losses) gains from investment transactions
(3,931,280
)
(1,890,090
)
(11,372,803
)
(3,819,851
)
Net change in unrealized appreciation (depreciation) on:
Debt securities
(4,447,878
)
4,553,027
(7,448,405
)
(3,945,277
)
Equity securities
1,215,013
337,258
3,905,834
411,276
CLO Fund Securities managed by affiliates
—
1,573,272
—
(12,168,189
)
CLO Fund Securities managed by non-affiliates
706,935
363,430
9,354,655
(491,863
)
Joint Venture Investments
2,063,261
1,146,355
2,654,032
(4,654,363
)
Derivatives
(179,416
)
(461,629
)
(873,473
)
(999,612
)
Total net change in unrealized appreciation (depreciation)
(642,085
)
7,511,713
7,592,643
(21,848,028
)
Net realized and unrealized appreciation (depreciation) on investments
(4,573,365
)
5,621,623
(3,780,160
)
(25,667,879
)
Realized (losses) gains on extinguishments of Debt
—
—
(1,834,963
)
154,571
Net Increase (Decrease) In Stockholders’ Equity Resulting From Operations
$
9,144,486
$
8,318,673
$
28,025,986
$
(17,450,561
)
Net Increase (Decrease) In Stockholders’ Equity Resulting from Operations per Common Share (1):
Basic:
$
1.00
$
1.87
$
3.41
$
(3.91
)
Diluted:
$
1.00
$
1.87
$
3.41
$
(3.91
)
Net Investment Income Per Common Share (1):
Basic:
$
1.50
$
0.61
$
4.10
$
1.81
Diluted:
$
1.50
$
0.61
$
4.10
$
1.81
Weighted Average Shares of Common Stock Outstanding—Basic (1)
9,131,456
4,441,778
8,213,661
4,461,650
Weighted Average Shares of Common Stock Outstanding—Diluted (1)
9,131,456
4,441,778
8,213,661
4,461,650
(1) The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, the weighted average shares outstanding and per share values have been adjusted retroactively to reflect the split for all periods presented.
