Tag: Results

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SeaChange Reports Fiscal Third Quarter 2022 Financial and Operational Results

  • 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)

Three Months Ended October 31,

Nine Months Ended October 31,

2021

2020

2021

2020

(Amounts in thousands)

(Amounts in thousands)

Product revenue:

License and subscription

$

2,172

$

994

$

6,306

$

3,739

Hardware

1,339

54

1,534

1,473

Total product revenue

3,511

1,048

7,840

5,212

Service revenue:

Maintenance and support

3,003

3,430

9,207

10,552

Professional services and other

637

488

1,696

1,112

Total service revenue

3,640

3,918

10,903

11,664

Total revenue

$

7,151

$

4,966

$

18,743

$

16,876
Posted on

Portman Ridge Finance Corporation Reports Third Quarter 2021 Earnings Results; Declares Quarterly Distribution of $0.62 Per Share

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:

September 30, 2021

(Unaudited)

December 31, 2020

Security Type

Cost/Amortized
Cost

Fair Value

{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}¹

Cost/Amortized
Cost

Fair Value

{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}¹

Senior Secured Loan

367,212,162

380,960,592

68

304,539,184

328,845,612

68

Junior Secured Loan

82,973,411

74,076,080

13

87,977,057

75,807,477

16

Senior Unsecured Bond

416,171

43,204

0

416,170

207,766

0

CLO Fund Securities

33,964,238

17,173,634

3

45,727,813

19,582,555

4

Equity Securities

29,041,687

22,298,759

4

24,593,639

13,944,876

3

Asset Manager Affiliates2

17,791,230

—

—

17,791,230

—

—

Joint Ventures

70,558,377

67,629,114

12

54,932,458

49,349,163

10

Derivatives

30,609

(1,982,091

)

—

30,609

(1,108,618

)

—

Total

$

601,987,885

$

560,199,292

100

{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

$

536,008,160

$

486,628,831

100

{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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.

Cautionary Statement Regarding Forward-Looking Statements

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

PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED BALANCE SHEETS

September 30,
2021

December 31,
2020

(Unaudited)

ASSETS

Investments at fair value:

Debt securities (amortized cost: 2021 – $450,601,744; 2020 – $392,932,411)

$

455,079,876

$

404,860,855

CLO Fund Securities managed by non-affiliates (amortized cost: 2021 – $33,964,238; 2020 – $45,727,813)

17,173,634

19,582,555

Equity securities (cost: 2021 – $29,041,687; 2020 – $24,593,639)

22,298,759

13,944,876

Asset Manager Affiliates (cost: 2021 – $17,791,230; 2020 – $17,791,230)

—

—

Joint Ventures (cost: 2021 – $70,558,377; 2020 – $54,932,458)

67,629,114

49,349,163

Total Investments at Fair Value, excluding derivatives (cost: 2021 – $601,957,277; 2020 – $535,977,551)

562,181,383

487,737,449

Cash and cash equivalents

28,539,989

6,990,008

Restricted cash

21,050,857

75,913,411

Interest receivable

4,228,748

2,972,546

Receivable for unsettled trades

7,070,394

25,107,598

Due from affiliates

464,342

357,168

Other assets

3,568,698

1,100,241

Total Assets

$

627,104,411

$

600,178,421

LIABILITIES

6.125{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes Due 2022 (net of offering costs of: 2020 – $1,058,351)

$

–

$

75,667,624

2018-2 Secured Notes (net of discount of: 2021 – $1,446,983; 2020 – $2,444,512)

162,415,715

$

249,418,186

4.875{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes Due 2026 (net of discount of: 2021 – $2,266,656; 2020 – $0, net of offering costs of: 2021 – $948,071; 2020 – $0)

104,785,273

—

Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of offering costs of: 2021 – $823,375; 2020 – $1,097,815)

68,247,523

48,223,083

Derivative liabilities (cost: 2021 – $30,609; 2020 – $30,609)

1,982,091

1,108,618

Payable for unsettled trades

4,903,384

—

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.

Posted on

New Mountain Finance Corporation Announces Financial Results for the Quarter Ended September 30, 2021

Reports Net Investment Income of $0.31 per Share, Exceeding Previous Guidance

Announces a Permanent Decrease in the Base Management Fee from 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 1.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Extends Previously Announced Dividend Protection Program

NEW YORK, November 03, 2021–(BUSINESS WIRE)–New Mountain Finance Corporation (NASDAQ: NMFC) (the “Company”, “we”, “us” or “our”) today announced its financial results for the quarter ended September 30, 2021 and reported third quarter net investment income of $0.31 per weighted average share. At September 30, 2021, net asset value (“NAV”) per share was $13.26, compared to $13.33 at June 30, 2021. The Company also announced that its board of directors declared a fourth quarter distribution of $0.30 per share, which will be payable on December 30, 2021 to holders of record as of December 16, 2021. For additional details related to the quarter ended September 30, 2021, please refer to the New Mountain Finance Corporation Form 10-Q filed with the SEC and the supplemental investor presentation which can be found on the Company’s website at http://www.newmountainfinance.com.

Selected Financial Highlights

(in thousands, except per share data)

September 30, 2021

Investment Portfolio(1)

$

3,033,076

Total Assets

$

3,168,111

Total Statutory Debt(3)

$

1,529,828

NAV(2)

$

1,284,905

NAV per Share

$

13.26

Statutory Debt/Equity

1.19x

Investment Portfolio Composition

September 30, 2021

Percent of Total

First Lien

$

1,472,741

48.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Second Lien(1)

743,040

24.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Subordinated

38,863

1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Preferred Equity

147,313

4.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Investment Fund

252,400

8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Common Equity and Other(4)

378,719

12.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Total

$

3,033,076

100.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

_____________________________

(1) Includes collateral for securities purchased under collateralized agreements to resell.
(2) Excludes non-controlling interest in New Mountain Net Lease Corporation (“NMNLC”).
(3) Excludes the Company’s United States (“U.S.”) Small Business Administration (“SBA”)-guaranteed debentures. Includes premium received on additional convertible notes issued in June 2019.
(4) Includes investments held in NMNLC.

We believe that the strength of the Company’s unique investment strategy – which focuses on middle market defensive growth companies that are well researched by New Mountain Capital, L.L.C. (“New Mountain”), a leading alternative investment firm, is underscored by continued stable credit performance. The Company has had only twelve portfolio companies, representing approximately $276 million of the cost of all investments made since inception in October 2008, or approximately 3.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of $8.8 billion, go on non-accrual.

“We believe New Mountain’s strategy of focusing on ‘defensive growth’ industries and on companies that we know well continues to prove to be a successful strategy”, added Steven B. Klinsky, NMFC Chairman. “We believe one of our keys to success is the strength of the team, which we continue to build over time, now at approximately 190 employees.”

Robert A. Hamwee, CEO, commented: “The third quarter represented another solid quarter of performance for NMFC, which was highlighted by our $430 million in originations. With the launch of our at-the-market (“ATM”) program, we will continue to focus our efforts on investing in high-quality, defensive growth companies, which we believe is a major factor in being able to maintain a stable book value”.

John R. Kline, President and COO, commented: “We are pleased to announce a fourth quarter distribution of $0.30 per share based on our expectation that Q4 Net Investment Income will be at least $0.30 per share, prior to any fee waivers. Given our outlook for consistent operating performance and continued support, if needed, from our investment advisor, we remain confident that our Net Investment Income will continue to cover our quarterly dividend for the foreseeable future.”

Portfolio and Investment Activity1

As of September 30, 2021, the Company’s NAV was approximately $1,284.9 million and its portfolio had a fair value of approximately $3,033.1 million in 106 portfolio companies, with a weighted average YTM at Cost2 of approximately 8.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. For the three months ended September 30, 2021, the Company generated approximately $314.8 million of originations in fifteen new portfolio companies and approximately $114.1 million of originations, including commitments3 for follow-on investments in thirteen portfolio companies held as of June 30, 2021. For the three months ended September 30, 2021, the Company had $43.9 million of asset sales and cash repayments3 of approximately $446.9 million.

Consolidated Results of Operations4

The Company’s total investment income for the three months ended September 30, 2021 and 2020 was approximately $68.2 million and $65.3 million, respectively.

The Company’s total net expenses, after income tax expense, for the three months ended September 30, 2021 and 2020 were approximately $37.8 million and $36.5 million, respectively. Total net expenses, after income tax expense, for the three months ended September 30, 2021 and 2020 consisted of approximately $17.6 million and $18.1 million, respectively, of costs associated with the Company’s borrowings and approximately $17.7 million and $16.7 million, respectively, in net management and incentive fees. Since the Company’s initial public offering (“IPO”), the base management fee calculation has deducted the borrowings under the New Mountain Finance SPV Funding, L.L.C. credit facility (the “SLF Credit Facility”). The SLF Credit Facility had historically consisted of primarily lower yielding assets at higher advance rates. As part of an amendment to the Company’s existing credit facilities with Wells Fargo Bank, National Association, the SLF Credit Facility merged with and into the New Mountain Finance Holdings, L.L.C. credit facility (the “Holdings Credit Facility”) on December 18, 2014. Post credit facility merger and to be consistent with the methodology since the IPO, New Mountain Finance Advisers BDC, L.L.C. (the “Investment Adviser”) will continue to waive management fees on the leverage associated with those assets held under revolving credit facilities that share the same underlying yield characteristics with investments that were leveraged under the legacy SLF Credit Facility. Effective as of and for the quarter ended March 31, 2021 through the quarter ending December 31, 2022, the Investment Adviser has entered into a fee waiver agreement pursuant to which the Investment Adviser will waive base management fees in order to reach a target base management fee of 1.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on gross assets (the “Reduced Base Management Fee”) as opposed to the Company’s current base management fee of 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on gross assets less the borrowings under the SLF Credit Facility and less cash and cash equivalents (the “Base Management Fee”). If, for any quarterly period during the term of the fee waiver agreement, the Reduced Base Management Fee would be greater than the Base Management Fee calculated under the terms of the Investment Management Agreement, the Investment Adviser shall only be entitled to the lesser of those two amounts. The Investment Adviser cannot recoup management fees and incentive fees that the Investment Adviser has previously waived. For the three months ended September 30, 2021 and 2020 management fees waived were approximately $3.8 million and $2.8 million, respectively. For the three months ended September 30, 2021 and 2020 incentive fees waived were approximately $0 and $0.5 million, respectively. The Company’s net direct and indirect professional, administrative, other general and administrative and income tax expenses for the three months ended September 30, 2021 and 2020 were approximately $2.5 million and $1.7 million, respectively.

For the three months ended September 30, 2021 and 2020, the Company recorded approximately ($8.5) million and $59.4 million, respectively, of net realized and unrealized (losses) gains.

Liquidity and Capital Resources

As of September 30, 2021, the Company had cash and cash equivalents of approximately $83.4 million and total statutory debt outstanding of approximately $1,529.8 million5, which consisted of approximately $493.3 million of the $730.0 million of total availability on the Holdings Credit Facility, $150.0 million of the $188.5 million of total availability on the Company’s senior secured revolving credit facility (the “NMFC Credit Facility”), $167.8 million of the $280.0 million of total availability on the Company’s secured revolving credit facility (the “DB Credit Facility”), $0 of the $50.0 million of total availability on the uncommitted revolving loan agreement (the “Unsecured Management Company Revolver”), $5.8 million of the $10.0 million of total availability on the senior secured revolving credit facility (the “NMNLC Credit Facility II”), $201.4 million6 of convertible notes outstanding and $511.5 million of unsecured notes outstanding. Additionally, the Company had $300.0 million of SBA-guaranteed debentures outstanding as of September 30, 2021.

Portfolio and Asset Quality1

The Company puts its largest emphasis on risk control and credit performance. On a quarterly basis, or more frequently if deemed necessary, the Company formally rates each portfolio investment on a scale of one to four. Each investment is assigned an initial rating of a “2” under the assumption that the investment is performing materially in-line with expectations. Any investment performing materially below our expectations, where the risk of loss has materially increased since the original investment, would be downgraded from the “2” rating to a “3” or a “4” rating, based on the deterioration of the investment. An investment rating of a “4” could be moved to non-accrual status and the final development could be an actual realization of a loss through a restructuring or impaired sale.

As of September 30, 2021, seven portfolio companies had an investment rating of “3” and seven portfolio companies had an investment rating of “4”. The Company’s investments in the portfolio companies with an investment rating of “3” had an aggregate cost basis of approximately $168.4 million and an aggregate fair value of approximately $122.5 million. The Company’s investment in portfolio companies with an investment rating of “4” had an aggregate cost basis of approximately $138.7 million and an aggregate fair value of approximately $52.9 million.

Recent Developments

On October 27, 2021, the Company’s board of directors declared a fourth quarter 2021 distribution of $0.30 per share payable on December 30, 2021 to holders of record as of December 16, 2021.

On November 1, 2021, the Company entered into Amendment No. 1 to the Investment Management Agreement, pursuant to which the Base Management Fee will be reduced from 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s gross assets to 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s gross assets.

On November 2, 2021, the Investment Adviser extended the term of the Fee Waiver Agreement to be effective through the quarter ended December 31, 2023, rather than the quarter ended December 31, 2022. Under the Fee Waiver Agreement, the Investment Adviser will continue to waive base management fees in order to reach a target base management fee of 1.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on gross assets.

On November 3, 2021, the Company entered into an equity distribution agreement (the “Distribution Agreement“) with B. Riley Securities, Inc. and Raymond James & Associates, Inc. Under the Distribution Agreement, the Company may offer for sale, from time to time, and sell, by means of “at the market” offerings, up to $250,000,000 in aggregate amount of shares of its common stock. Subject to the terms and conditions of the Equity Distribution Agreement, sales of common stock, if any, may be made in transactions that are deemed to be an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended.

_________________________________

1 Includes collateral for securities purchased under collateralized agreements to resell.
2 References to “YTM at Cost” assume the accruing investments, including secured collateralized agreements, in our portfolio as of a certain date, the ‘‘Portfolio Date’’, are purchased at cost on that date and held until their respective maturities with no prepayments or losses and are exited at par at maturity. This calculation excludes the impact of existing leverage. YTM at Cost uses the LIBOR curves at each quarter’s respective end date. The actual yield to maturity may be higher or lower due to the future selection of LIBOR contracts by the individual companies in the Company’s portfolio or other factors.
3 Originations exclude payment-in-kind (“PIK”); originations, repayments, and sales excludes revolvers, unfunded commitments, bridges, return of capital, and realized gains / losses.
4 Excludes net income related to non-controlling interests in NMNLC. For the quarter ended September 30, 2021, $0.2 million of dividend income is excluded from investment income and $0.8 million of unrealized gains is excluded from net realized and unrealized gains. For the quarter ended September 30, 2020, $0.3 million of dividend income is excluded from investment income and $1.1 million of unrealized gains is excluded from net realized and unrealized gains.
5 Excludes the Company’s United States (“U.S.”) Small Business Administration (“SBA”)-guaranteed debentures.
6 Includes premium received on additional convertible notes issued in June 2019.

Conference Call

New Mountain Finance Corporation will host a conference call at 10 a.m. Eastern Time on Thursday, November 4, 2021, to discuss its third quarter 2021 financial results. All interested parties may participate in the conference call by dialing +1 (877) 443-9109 approximately 15 minutes prior to the call. International callers should dial +1 (412) 317-1082. This conference call will also be broadcast live over the Internet and can be accessed by all interested parties through the Company’s website, http://ir.newmountainfinance.com. To listen to the live call, please go to the Company’s website at least 15 minutes prior to the start of the call to register and download any necessary audio software. Following the call, you may access a replay of the event via audio webcast on our website. We will be utilizing a presentation during the conference call and we have posted the presentation to the investor relations section of our website.

New Mountain Finance Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data)

(unaudited)

September 30, 2021

December 31, 2020

Assets

Investments at fair value

Non-controlled/non-affiliated investments (cost of $2,260,975 and $2,281,184 respectively)

$

2,206,300

$

2,249,615

Non-controlled/affiliated investments (cost of $79,591 and $115,543, respectively)

111,605

103,012

Controlled investments (cost of $663,216 and $600,942, respectively)

693,749

600,875

Total investments at fair value (cost of $3,003,782 and $2,997,669, respectively)

3,011,654

2,953,502

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)

21,422

21,422

Cash and cash equivalents

83,357

78,966

Interest and dividend receivable

32,773

28,411

Receivable from unsettled securities sold

8,990

9,019

Receivable from affiliates

–

117

Deferred tax asset

–

101

Other assets

9,915

5,981

Total assets

$

3,168,111

$

3,097,519

Liabilities

Borrowings

Unsecured Notes

$

511,500

$

453,250

Holdings Credit Facility

493,263

450,163

SBA-guaranteed debentures

300,000

300,000

Convertible Notes

201,443

201,520

DB Credit Facility

167,800

244,000

NMFC Credit Facility

149,977

165,500

NMNLC Credit Facility II

5,845

–

Deferred financing costs (net of accumulated amortization of $38,985 and $33,325, respectively)

(21,337)

(16,839)

Net borrowings

1,808,491

1,797,594

Payable for unsettled securities purchased

24,658

26,842

Management fee payable

9,988

10,419

Interest payable

9,528

15,587

Incentive fee payable

7,661

7,354

Payable to affiliates

316

867

Deferred tax liability

13

–

Other liabilities

2,498

1,967

Total liabilities

1,863,153

1,860,630

Commitments and contingencies

Net Assets

Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued

–

–

Common stock, par value $0.01 per share, 200,000,000 shares authorized, and 96,906,988 and 96,827,342 shares issued and outstanding, respectively

969

968

Paid in capital in excess of par

1,270,719

1,269,671

Accumulated undistributed (overdistributed) earnings

13,217

(48,764)

Total net assets of New Mountain Finance Corporation

$

1,284,905

$

1,221,875

Non-controlling interest in New Mountain Net Lease Corporation

20,053

15,014

Total net assets

$

1,304,958

$

1,236,889

Total liabilities and net assets

$

3,168,111

$

3,097,519

Number of shares outstanding

96,906,988

96,827,342

Net asset value per share of New Mountain Finance Corporation

$

13.26

$

12.62

New Mountain Finance Corporation

Consolidated Statements of Operations

(in thousands, except shares and per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Investment income

From non-controlled/non-affiliated investments:

Interest income (excluding Payment-in-kind (“PIK”) interest income)

$

40,540

$

41,854

$

119,919

$

144,383

PIK interest income

1,903

2,547

6,501

6,464

Dividend income

867

–

867

–

Non-cash dividend income

1,956

2,274

7,324

6,898

Other income

5,249

1,497

9,651

4,085

From non-controlled/affiliated investments:

Interest income (excluding PIK interest income)

296

781

1,322

1,963

PIK interest income

182

217

182

(1,131)

Dividend income

288

687

288

2,096

Non-cash dividend income

831

–

3,881

(3,418)

Other income

79

427

284

1,002

From controlled investments:

Interest income (excluding PIK interest income)

1,253

2,011

3,570

4,581

PIK interest income

3,614

2,244

10,384

6,393

Dividend income

9,686

8,107

31,278

24,061

Non-cash dividend income

918

1,576

3,533

5,716

Other income

812

1,299

3,759

2,479

Total investment income

68,474

65,521

202,743

205,572

Expenses

Incentive fee

7,661

7,135

22,207

21,857

Management fee

13,740

12,877

40,885

39,869

Interest and other financing expenses

17,693

18,077

54,949

59,500

Administrative expenses

1,082

1,024

3,240

3,303

Professional fees

923

731

2,413

2,605

Other general and administrative expenses

490

442

1,398

1,383

Total expenses

41,589

40,286

125,092

128,517

Less: management fees waived

(3,752)

(3,341)

(11,193)

(10,067)

Less: expenses waived and reimbursed

–

(589)

–

(924)

Net expenses

37,837

36,356

113,899

117,526

Net investment income before income taxes

30,637

29,165

88,844

88,046

Income tax (benefit) expense

(8)

123

15

116

Net investment income

30,645

29,042

88,829

87,930

Net realized gains (losses):

Non-controlled/non-affiliated investments

2,459

30

2,797

(4,431)

Non-controlled/affiliated investments

20,549

12

8,338

12

Controlled investments

–

5

1,557

12

New Mountain Net Lease Corporation

–

–

–

812

Net change in unrealized (depreciation) appreciation:

Non-controlled/non-affiliated investments

(19,951)

21,410

(22,601)

(67,407)

Non-controlled/affiliated investments

(20,469)

(1,111)

44,545

(14,718)

Controlled investments

9,684

39,943

30,600

(8,278)

New Mountain Net Lease Corporation

–

–

–

(812)

Foreign Currency

(13)

–

(13)

–

Benefit (provision) for taxes

1

257

(114)

778

Net realized and unrealized (losses) gains

(7,740)

60,546

65,109

(94,032)

Net increase (decrease) in net assets resulting from operations

22,905

89,588

153,938

(6,102)

Less: Net increase in net assets resulting from operations related to non-controlling interests in New Mountain Net Lease Corporation

(1,058)

(1,398)

(4,789)

(1,584)

Net increase (decrease) in net assets resulting from operations related to New Mountain Finance Corporation

$

21,847

$

88,190

$

149,149

$

(7,686)

Basic earnings (loss) per share

$

0.23

$

0.91

$

1.54

$

(0.08)

Weighted average shares of common stock outstanding-basic

96,906,988

96,827,342

96,854,474

96,827,342

Diluted earnings (loss) per share

$

0.22

$

0.82

$

1.42

$

(0.08)

Weighted average shares of common stock outstanding-diluted

110,164,573

110,084,927

110,112,059

110,084,927

Distributions declared and paid per share

$

0.30

$

0.30

$

0.90

$

0.94

ABOUT NEW MOUNTAIN FINANCE CORPORATION

New Mountain Finance Corporation is a closed-end, non-diversified and externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The Company’s investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. The Company’s first lien debt may include traditional first lien senior secured loans or unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and subordinated loans. Unitranche loans will expose the Company to the risks associated with second lien and subordinated loans to the extent it invests in the “last out” tranche. In some cases, the investments may also include small equity interests. The Company’s investment activities are managed by its Investment Adviser, New Mountain Finance Advisers BDC, L.L.C., which is an investment adviser registered under the Investment Advisers Act of 1940, as amended. More information about New Mountain Finance Corporation can be found on the Company’s website at http://www.newmountainfinance.com.

ABOUT NEW MOUNTAIN CAPITAL

New Mountain Capital is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease investment strategies with over $35 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit http://www.newmountaincapital.com.

FORWARD-LOOKING STATEMENTS

Statements included herein may contain “forward-looking statements”, which relate to our future operations, future performance or our financial condition. Forward-looking statements 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 volatility on our business, portfolio companies, our industry and the global economy. Actual results and outcomes may differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those described from time to time in our filings with the Securities and Exchange Commission or factors that are beyond our control. New Mountain Finance Corporation undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as may be required by law. All forward-looking statements speak only as of the time of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006296/en/

Contacts

New Mountain Finance Corporation
Investor Relations
Shiraz Y. Kajee, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505

Posted on

Capstone Green Energy (NASDAQ:CGRN) to Announce Its Second Quarter Fiscal Year 2022 Financial Results on Wednesday, November 10, 2021

Webcast Scheduled for 1:45 PM PT/4:45 PM ET November 10, 2021

VAN NUYS, CA / ACCESSWIRE / October 29, 2021 / Capstone Green Energy Corporation (www.CapstoneGreenEnergy.com) (NASDAQ:CGRN), a global leader in carbon reduction and on-site resilient green energy solutions, announced today that on Wednesday, November 10, 2021, after market close, it expects to release full financial results for its second quarter of fiscal year 2022, ended September 30, 2021. Later that same day, at 1:45 p.m. Pacific Time (4:45 p.m. Eastern Time), Capstone will host a live webcast to discuss those results.

At the end of the conference call, Capstone will host a question-and-answer session to provide an opportunity for financial analysts to ask questions. Investors and interested individuals are invited to listen to the webcast by logging on to the Company’s investor relations webpage at www.capstonegreenenergy.com. A replay of the webcast will be available on the site for 30 days.

About Capstone Green Energy

Capstone Green Energy (www.CapstoneGreenEnergy.com) (NASDAQ:CGRN) is a leading provider of customized microgrid solutions and on-site energy technology systems focused on helping customers around the globe meet their environmental, energy savings, and resiliency goals. Capstone Green Energy focuses on four key business lines. Through its Energy as a Service (EaaS) business, it offers rental solutions utilizing its microturbine energy systems and battery storage systems, comprehensive Factory Protection Plan (FPP) service contracts that guarantee life-cycle costs, as well as aftermarket parts. Energy Conversion Products are driven by the Company’s industry-leading, highly efficient, low-emission, resilient microturbine energy systems offering scalable solutions in addition to a broad range of customer-tailored solutions, including hybrid energy systems and larger frame industrial turbines. The Energy Storage Products business line designs and installs microgrid storage systems creating customized solutions using a combination of battery technologies and monitoring software. Through Hydrogen Energy Solutions, Capstone Green Energy offers customers a variety of hydrogen products, including the Company’s microturbine energy systems.

For customers with limited capital or short-term needs, Capstone offers rental systems; for more information, contact: rentals@CGRNenergy.com. To date, Capstone has shipped over 10,000 units to 83 countries and estimates that, in FY21, it saved customers over $217 million in annual energy costs and approximately 397,000 tons of carbon. Total savings over the last three years are estimated at 1,115,100 tons of carbon and $698 million in annual energy savings.

For more information about the Company, please visit: www.CapstoneGreenEnergy.com. Follow Capstone Green Energy on Twitter, LinkedIn, Instagram, Facebook, and YouTube.

CONTACT:
Capstone Green Energy
Investor and investment media inquiries:
818-407-3628
ir@CGRNenergy.com

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SOURCE: Capstone Green Energy Corporation

View source version on accesswire.com:
https://www.accesswire.com/670288/Capstone-Green-Energy-NASDAQCGRN-to-Announce-Its-Second-Quarter-Fiscal-Year-2022-Financial-Results-on-Wednesday-November-10-2021

Posted on

Horizon Technology Finance Corporation Announces Third Quarter 2021 Financial Results

– Net Investment Income per Share of $0.40; NAV per Share of $11.63 –

– Debt Portfolio Yield of 16.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} –

– Declares Regular Monthly Distributions of $0.10 per Share through March 2022 and $0.05 Special Distribution Payable in December 2021 –

– Grew Portfolio to Record $452 Million –

FARMINGTON, Conn., Oct. 26, 2021 /PRNewswire/ — Horizon Technology Finance Corporation (NASDAQ: HRZN) (“HRZN” or the “Company”), a leading specialty finance company that provides capital in the form of secured loans to venture capital backed companies in the technology, life science, healthcare information and services, and sustainability industries, today announced its financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights

  • Net investment income (“NII”) of $8.0 million, or $0.40 per share, compared to $5.9 million, or $0.34 per share for the prior-year period

  • Total investment portfolio of $452.3 million as of September 30, 2021

  • Net asset value of $237.6 million, or $11.63 per share, as of September 30, 2021

  • Annualized portfolio yield on debt investments of 16.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the quarter

  • HRZN funded 15 loans totaling $98.9 million

  • HRZN’s investment adviser, Horizon Technology Finance Management LLC (“HTFM”), originated $141.4 million through its lending platform (“Horizon Platform”), inclusive of the HRZN loans

  • Raised total net proceeds of approximately $6.6 million with “at-the-market” (“ATM”) offering program

  • Experienced liquidity events from five portfolio companies

  • Cash of $42.9 million and credit facility capacity of $121.8 million as of September 30, 2021

  • Held portfolio of warrant and equity positions in 74 companies as of September 30, 2021

  • Undistributed spillover income of $0.44 per share as of September 30, 2021

  • Subsequent to quarter end, declared monthly distributions of $0.10 per share payable in January, February and March 2022 and a special distribution of $0.05 per share payable in December 2021

“We had an excellent third quarter, as HRZN generated net investment income of $0.40 per share, significantly grew its portfolio and increased its NAV per share,” said Robert D. Pomeroy, Jr., Chairman and Chief Executive Officer of HRZN. “The momentum of the ‘Horizon’ brand and the Horizon Platform continued to accelerate, which was clearly evidenced by HRZN’s quarterly record of $99 million of originated loans. HRZN also completed five portfolio exits, leading to a debt portfolio yield of over 16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, once again among the leaders in the industry. HTFM’s predictive pricing strategy continues to generate best-in-class yields, and the power of the Horizon Platform has created a portfolio for HRZN that is the largest in its history and is producing attractive yields for HRZN’s shareholders.”

“In addition to the strong growth in its portfolio, the credit quality of HRZN’s portfolio remains very solid, with nearly 97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of its portfolio 3-rated or better,” continued Mr. Pomeroy. “Demand for venture debt remains robust, and with HRZN’s deep committed backlog and ample capacity to originate loans on its platform, as well as HTFM’s pipeline of opportunities, HRZN is in a prime position to continue delivering compelling returns to its shareholders.”

Third Quarter 2021 Operating Results

Total investment income for the quarter ended September 30, 2021 grew 33{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $16.4 million, compared to $12.3 million for the quarter ended September 30, 2020, primarily due to growth in interest income on investments resulting from an increase in the average size of the debt investment portfolio, as well as higher fee income.

The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended September 30, 2021 and 2020 was 16.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 15.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively. The Company calculates the dollar-weighted annualized yield on average debt investments for any period measured as (1) total investment income (excluding dividend income) during the period divided by (2) the average of the fair value of debt investments outstanding on (a) the last day of the calendar month immediately preceding the first day of the period and (b) the last day of each calendar month during the period. The dollar-weighted annualized yield on average debt investments is higher than what investors will realize because it does not reflect expenses or any sales load paid by investors.

Total expenses for the quarter ended September 30, 2021 were $8.3 million, compared to $6.5 million for the quarter ended September 30, 2020. The increase was primarily due to a $0.5 million increase in interest expense, a $0.4 million increase in the base management fee and a $0.5 million increase in the performance based incentive fee.

Net investment income for the quarter ended September 30, 2021 was $8.0 million, or $0.40 per share, compared to $5.9 million, or $0.34 per share, for the quarter ended September 30, 2020.

For the quarter ended September 30, 2021, net realized gain on investments was $1.3 million, or $0.07 per share, compared to $1.2 million, or $0.07 per share, for the quarter ended September 30, 2020.

For the quarter ended September 30, 2021, net unrealized appreciation on investments was $3.4 million, or $0.17 per share, compared to net unrealized depreciation on investments of $10.3 million, or $0.60 per share, for the prior-year period.

Portfolio Summary and Investment Activity

As of September 30, 2021, the Company’s debt portfolio consisted of 43 secured loans with an aggregate fair value of $429.9 million. In addition, the Company’s total warrant, equity and other investments in 76 portfolio companies had an aggregate fair value of $22.4 million. Total portfolio investment activity for the three and nine months ended September 30, 2021 and 2020 was as follows:

($ in thousands)

For the Three Months Ended

September 30,

For the Nine Months Ended
September 30,

2021

2020

2021

2020

Beginning portfolio

$ 404,121

$ 355,880

$ 352,545

$ 319,551

New debt investments

98,592

16,094

217,252

121,648

Principal payments received on investments

(3,221)

(6,419)

(11,303)

(20,344)

Early pay-offs

(50,367)

(43,542)

(107,957)

(90,785)

Accretion of debt investment fees

1,016

795

3,186

3,080

New debt investment fees

(962)

(202)

(2,332)

(1,415)

Warrants received in settlement of fee income

—

—

—

978

Proceeds from sale of investments

(1,553)

(1,945)

(5,285)

(8,200)

Dividend income from controlled affiliate
investment

—

—

—

118

Net realized gain (loss) on investments

1,344

1,178

(1,882)

3,945

Net unrealized appreciation (depreciation) on
investments

3,376

(10,288)

8,122

(16,827)

Other

—

199

—

1

Ending portfolio

$ 452,346

$ 311,750

$ 452,346

$ 311,750

Portfolio Asset Quality

The following table shows the classification of HRZN’s loan portfolio at fair value by internal credit rating as of September 30, 2021, June 30, 2021 and December 31, 2020:

($ in
thousands)

September 30, 2021

June 30, 2021

December 31, 2020

Number of
Investments

Debt
Investments at
Fair Value

Percentage
of Debt
Investments

Number of
Investments

Debt
Investments at
Fair Value

Percentage
of Debt
Investments

Number of
Investments

Debt
Investments at
Fair Value

Percentage of
Debt
Investments

Credit
Rating

4

5

$ 56,337

13.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

3

$ 44,286

11.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

6

$ 77,950

23.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

3

35

359,658

83.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

32

318,448

82.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

24

240,933

72.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

2

2

11,141

2.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

4

23,080

6.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

3

12,875

3.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

1

1

2,800

0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

—

—

1

1,737

0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Total

43

$ 429,936

100.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

39

$ 385,814

100.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

34

$ 333,495

100.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

As of September 30, 2021, HRZN’s loan portfolio had a weighted average credit rating of 3.1, compared to 3.1 as of June 30, 2021 and 3.2 as of December 31, 2020, respectively, with 4 being the highest credit quality rating and 3 being the rating for a standard level of risk. A rating of 2 represents an increased level of risk and, while no loss is currently anticipated for a 2-rated loan, there is potential for future loss of principal. A rating of 1 represents deteriorating credit quality and high degree of risk of loss of principal.

As of September 30, 2021, there was one debt investment with an internal credit rating of 1, with a cost of $3.0 million and a fair value of $2.8 million. As of June 30, 2021 there were no debt investments with an internal credit rating of 1. As of December 31, 2020, there was one debt investment with an internal credit rating of 1, with a cost of $6.8 million and a fair value of $1.7 million.

Liquidity and Capital Resources

As of September 30, 2021, the Company had $88.1 million in available liquidity, consisting of $42.9 million in cash and money market funds, and $45.2 million in funds available under existing credit facility commitments.

As of September 30, 2021, there was $37.5 million in outstanding principal balance under our $125.0 million revolving credit facility (“Key Facility”). The Key Facility allows for an increase in the total loan commitment up to an aggregate commitment of $150.0 million. There can be no assurance that any additional lenders will make any commitments under the Key Facility.

Additionally, as of September 30, 2021, there was $65.8 million in outstanding principal balance under our $100 million senior secured debt facility with a large U.S.-based insurance company at an interest rate of 4.60{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Horizon Funding Trust 2019-1, a wholly-owned subsidiary of HRZN, previously issued $100.0 million of Asset-Backed Notes (the “Notes”) rated A+(sf) by Morningstar Credit Ratings, LLC, and backed by $141.1 million of secured loans originated by HRZN. The Notes bear interest at a fixed interest rate of 4.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} per annum and have a stated maturity date of September 15, 2027. As of September 30, 2021, the Notes had an outstanding principal balance of $100.0 million.

During the three months ended September 30, 2021, the Company sold 395,068 shares of common stock under its ATM offering program with Goldman Sachs & Co. LLC and B. Riley FBR, Inc. For the same period, the Company received total accumulated net proceeds of approximately $6.6 million, including $0.2 million of offering expenses, from these sales.

As of September 30, 2021, the Company’s debt to equity leverage ratio was 110{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, within the Company’s 80-120{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} targeted leverage range. The asset coverage ratio for borrowed amounts was 191{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Liquidity Events

During the quarter ended September 30, 2021, HRZN experienced liquidity events from five portfolio companies. Liquidity events for HRZN may consist of the sale of warrants or equity in portfolio companies, loan prepayments, sale of owned assets or receipt of success fees.

In July, Revinate, Inc. prepaid its outstanding principal balance of $10.0 million on its venture loan, plus interest, end-of-term payment and prepayment fee. HRZN continues to hold warrants in the company.

In August, Bardy Diagnostics, Inc. was acquired by Hill-Rom Holdings, Inc. and prepaid its outstanding principal balance of $25.0 million on its venture loan, plus interest, end-of-term payment, prepayment and success fee. HRZN also received proceeds totaling $1.2 million from the redemption of warrants it held in the company.

In September, Silk Technologies, Inc. prepaid its outstanding principal balance of $9.5 million on its venture loan, plus interest, end-of-term payment and prepayment fee. HRZN continues to hold warrants in the company.

In September, OutboundEngine, Inc. was acquired by Elm Street Technology, LLC and prepaid its outstanding principal balance of $5.9 million on its venture loan, plus interest, end-of-term payment and prepayment fee. HRZN also received proceeds totaling $0.3 million from the redemption of warrants it held in the company.

In September, HRZN received a $0.5 million success fee from its investment in Silkroad Technology, Inc.

Net Asset Value

At September 30, 2021, the Company’s net assets were $237.6 million, or $11.63 per share, compared to $205.2 million, or $11.17 per share, as of September 30, 2020, and $212.6 million, or $11.02 per share, as of December 31, 2020.

For the quarter ended September 30, 2021, net increase in net assets resulting from operations was $12.8 million, or $0.63 per share, compared to a net decrease in net assets resulting from operations of $3.3 million, or $0.19 per share, for the quarter ended September 30, 2020.

Stock Repurchase Program

On April 23, 2021, the Company’s board of directors extended the Company’s previously authorized stock repurchase program until the earlier of June 30, 2022 or the repurchase of $5.0 million of the Company’s common stock. During the quarter ended September 30, 2021, the Company did not repurchase any shares of its common stock. From the inception of the stock repurchase program through September 30, 2021, the Company has repurchased 167,465 shares of its common stock at an average price of $11.22 on the open market at a total cost of $1.9 million.

Recent Developments

On October 5, 2021, the Company funded a $2.5 million debt investment to an existing portfolio company, Branded Online, Inc.

On October 8, 2021, Getaround, Inc. prepaid its outstanding principal balance of $25.0 million on its venture loan, plus interest, end-of-term payment and prepayment fee. The Company continues to hold warrants in Getaround, Inc.

On October 12, 2021, Topia Mobility, Inc. prepaid its outstanding principal balance of $10.0 million on its venture loan, plus interest, end-of-term payment and prepayment fee. The Company continues to hold warrants in Topia Mobility, Inc.

Monthly and Special Distributions Declared in Fourth Quarter 2021

On October 22, 2021, the Company’s board of directors declared monthly distributions of $0.10 per share payable in each of January, February and March 2022 and a special distribution of $0.05 per share payable in December 2021. The following tables shows these monthly and special distributions, which total $0.35 per share:

Monthly Distributions

Ex-Dividend Date

Record Date

Payment Date

Amount per Share

December 16, 2021

December 17, 2021

January 14, 2022

$0.10

January 18, 2022

January 19, 2022

February 16, 2022

$0.10

February 17, 2022

February 18, 2022

March 16, 2022

$0.10

Total:

$0.30

Special Distribution

Ex-Dividend Date

Record Date

Payment Date

Amount per Share

November 17, 2021

November 18, 2021

December 15, 2021

$0.05

After paying distributions of $0.30 per share and earning net investment income of $0.40 per share for the quarter, the Company’s undistributed spillover income as of September 30, 2021 was $0.44 per share. Spillover income includes any ordinary income and net capital gains from the preceding tax years that were not distributed during such tax years.

When declaring distributions, the HRZN board of directors reviews estimates of taxable income available for distribution, which may differ from consolidated net income under generally accepted accounting principles due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of spillover income carried over from a given year for distribution in the following year. The final determination of taxable income for each tax year, as well as the tax attributes for distributions in such tax year, will be made after the close of the tax year.

Conference Call

The Company will host a conference call on Wednesday, October 27, 2021, at 9:00 a.m. ET to discuss its latest corporate developments and financial results. To participate in the call, please dial (877) 407-9716 (domestic) or (201) 493-6779 (international). The access code for all callers is 13724271. The Company recommends joining the call at least 5 minutes in advance. In addition, a live webcast will be available on the Company’s website atwww.horizontechfinance.com.

A webcast replay will be available on the Company’s website for 30 days following the call.

About Horizon Technology Finance

Horizon Technology Finance Corporation (NASDAQ: HRZN) is a leading specialty finance company that provides capital in the form of secured loans to venture capital backed companies in the technology, life science, healthcare information and services, and sustainability industries. The investment objective of HRZN is to maximize its investment portfolio’s return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments. Horizon Technology Finance Management LLC is headquartered in Farmington, Connecticut, with a regional office in Pleasanton, California, and investment professionals located in Portland, Maine, Austin, Texas, and Reston, Virginia. To learn more, please visit www.horizontechfinance.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. 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 HRZN’s filings with the Securities and Exchange Commission. HRZN 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.

Contacts:

Investor Relations:
ICR
Garrett Edson
ir@horizontechfinance.com
(860) 284-6450

Media Relations:
ICR
Chris Gillick
HorizonPR@icrinc.com
(646) 677-1819

Horizon Technology Finance Corporation and Subsidiaries
Consolidated Statements of Assets and Liabilities
(Dollars in thousands, except share and per share data)

September 30,

December 31,

2021

2020

(unaudited)

Assets

Non-affiliate investments at fair value (cost of $437,919 and $343,158, respectively)

$ 448,421

$ 343,498

Non-controlled affiliate investments at fair value (cost of $3,820 and $6,854, respectively)

2,800

7,547

Controlled affiliate investments at fair value (cost of $1,450 and $1,500, respectively)

1,125

1,500

Total investments at fair value (cost of $443,189 and $351,512, respectively)

452,346

352,545

Cash

20,817

19,502

Investments in money market funds

22,057

27,199

Restricted investments in money market funds

1,504

1,057

Interest receivable

6,397

4,946

Other assets

2,652

1,908

Total assets

$ 505,773

$ 407,157

Liabilities

Borrowings

$ 257,852

$ 185,819

Distributions payable

6,128

5,786

Base management fee payable

698

563

Incentive fee payable

2,012

975

Other accrued expenses

1,493

1,417

Total liabilities

268,183

194,560

Commitments and contingencies

Net assets

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero
 shares issued and outstanding as of September 30, 2021 and December 31, 2020

—

—

Common stock, par value $0.001 per share, 100,000,000 shares authorized,
 20,592,640 and 19,453,821 shares issued and 20,425,175 and 19,286,356 shares outstanding as of
September 30, 2021 and December 31, 2020, respectively

21

19

Paid-in capital in excess of par

288,861

271,287

Distributable earnings

(51,292)

(58,709)

Total net assets

237,590

212,597

Total liabilities and net assets

$ 505,773

$ 407,157

Net asset value per common share

$ 11.63

$ 11.02

Horizon Technology Finance Corporation and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except share and per share data)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Investment income

Interest income on investments

Interest income on non-affiliate investments

$ 14,035

$ 10,974

$ 38,965

$ 32,286

Interest income on affiliate investments

—

175

213

532

Total interest income on investments

14,035

11,149

39,178

32,818

Fee income

Prepayment fee income on non-affiliate investments

1,204

1,156

2,460

1,911

Success fee income on non-affiliate investments

1,100

—

1,100

—

Fee income on non-affiliate investments

28

23

320

1,112

Fee income on affiliate investments

—

3

12

10

Total fee income

2,332

1,182

3,892

3,033

Dividend income

Dividend income on controlled affiliate investments

—

—

—

118

Total dividend income

—

—

—

118

Total investment income

16,367

12,331

43,070

35,969

Expenses

Interest expense

3,112

2,607

8,781

7,331

Base management fee

1,997

1,616

5,595

4,865

Performance based incentive fee

2,012

1,465

5,040

4,212

Administrative fee

251

234

829

740

Professional fees

559

247

1,348

1,095

General and administrative

333

302

1,142

877

Total expenses

8,264

6,471

22,735

19,120

Net investment income before excise tax

8,103

5,860

20,335

16,849

Provision for excise tax

56

—

174

—

Net investment income

8,047

5,860

20,161

16,849

Net realized and unrealized gain (loss)

Net realized gain (loss) on non-affiliate investments

1,344

1,178

(2,372)

3,957

Net realized loss on controlled affiliate investments

—

—

—

(12)

Net realized gain (loss) on investments

1,344

1,178

(2,372)

3,945

Net realized loss on extinguishment of debt

—

—

(395)

—

Net realized gain (loss)

1,344

1,178

(2,767)

3,945

Net unrealized appreciation (depreciation) on non-affiliate
investments

3,929

(10,629)

10,314

(15,435)

Net unrealized (depreciation) appreciation on non-controlled affiliate
investments

(228)

341

(1,867)

(1,134)

Net unrealized depreciation on controlled affiliate investments

(325)

—

(325)

(258)

Net unrealized appreciation (depreciation) on investments

3,376

(10,288)

8,122

(16,827)

Net realized and unrealized gain (loss)

4,720

(9,110)

5,355

(12,882)

Net increase (decrease) in net assets resulting from operations

$ 12,767

$ (3,250)

$ 25,516

$ 3,967

Net investment income per common share

$ 0.40

$ 0.34

$ 1.02

$ 0.98

Net increase (decrease) in net assets per common share

$ 0.63

$ (0.19)

$ 1.29

$ 0.23

Distributions declared per share

$ 0.30

$ 0.30

$ 0.90

$ 0.95

Weighted average shares outstanding

20,269,813

17,245,662

19,826,790

17,111,359
Cision

Cision

View original content:https://www.prnewswire.com/news-releases/horizon-technology-finance-corporation-announces-third-quarter-2021-financial-results-301409081.html

SOURCE Horizon Technology Finance Corporation

Posted on

H2O Innovation Will Release its Q1-FY2022 Financial Results and Reminds That Warrants Expire on November 15, 2021

QUEBEC City, Oct. 13, 2021 (World NEWSWIRE) — (TSXV: HEO) – H2O Innovation Inc. (“H2O Innovation” or the “Corporation”) announces that it will launch its economic final results for the initially quarter of fiscal calendar year 2022 on Wednesday, November 10, 2021, at close to 8:00 a.m. (EST).

The Corporation will also host a meeting phone, on the exact same working day, at 10:00 a.m. (EST). Financial analysts and investors are invited to go to this convention phone in the course of which the 2022 initial quarter success will be offered. The contact will commence with a presentation by management followed by a issue-and-response time period. A slide presentation will be accessible on the Corporate Presentations web site of the Traders part of the Corporation’s web site.

Time and date:

Wednesday, November 10, 2021 at 10:00 a.m. (EST)

Dial in amount:

1-888-440-2131 or 438-803-0534

Warrants Expire on November 15, 2021
H2O Innovation reminds to all the warrant holders that the remarkable common share purchase warrants issued on November 14, 2019 (the “Warrants”), at an workout price of $1.40, will expire on November 15, 2021. Any Warrants that have not been exercised by 5:00 p.m. (Montreal time) on November 15, 2021 will quickly be cancelled.

The Warrants, which are publicly listed on the TSX Undertaking Exchange under the image HEO.WT, will be delisted right before the market place opens on November 16, 2021.

Holders of Warrants who desire to physical exercise their Warrants need to review the workout demands contained in the warrant indenture amongst TSX Have confidence in Firm, formerly regarded as AST Believe in Enterprise (Canada) (the “Warrant Agent”) and the Company dated as of November 14, 2019, which is available on SEDAR (www.sedar.com), and, if applicable, the certificate evidencing their Warrants. Holders of Warrants need to get hold of their lawful and financial investment advisors before distributing to the Warrant Agent the training variety and any other relevant documentation.

About H2O Innovation
Innovation is in our title, and it is what drives the organization. H2O Innovation is a comprehensive h2o answers corporation concentrated on offering greatest-in-course systems and companies to its prospects. The Corporation’s pursuits rely on a few pillars: i) Drinking water Technologies & Services (WTS) applies membrane systems and engineering experience to produce devices and services to municipal and industrial water, wastewater, and water reuse consumers, ii) Specialty Merchandise (SP) is a established of enterprises that manufacture and supply a full line of specialty chemical compounds, consumables and engineered items for the world wide h2o treatment method marketplace, and iii) Procedure & Routine maintenance (O&M) provides agreement functions and associated providers for drinking water and wastewater treatment method systems. Through innovation, we strive to simplify h2o. For much more info, stop by www.h2oinnovation.com.

Neither TSX Venture Trade nor its Regulation Providers Company (as that expression is described in the insurance policies of the TSX Undertaking Exchange) accepts duty for the adequacy or precision of this release.

Resource:
H2O Innovation Inc.
www.h2oinnovation.com

Call:
Marc Blanchet
+1 418-688-0170
marc.blanchet@h2oinnovation.com