• Logan Ridge Finance Corporation Announces First Quarter 2024 Financial Results

    Источник: Nasdaq GlobeNewswire / 08 май 2024 15:05:09   America/Chicago

    Reports Strong Results with Net Investment Income of $0.35 Per Share, Compared to $0.22 Per Share in the Previous Quarter; Net Asset Value Increased to $33.71 Per Share from $33.34 Per Share in the Previous Quarter

    Declared a Distribution of $0.33 Per Share for the Second Quarter of 2024, an Increase of 3% Compared to the First Quarter of 2024; Fifth Consecutive Quarterly Distribution Increase

    Continued Repurchasing Shares Under its Share Repurchase Program

    NEW YORK, May 08, 2024 (GLOBE NEWSWIRE) -- Logan Ridge Finance Corporation (“Logan Ridge”, “Logan”, “LRFC”, “Company”, “we”, “us” or “our”) (Nasdaq: LRFC) announced today its financial results for the first quarter ended March 31, 2024.

    First Quarter 2024 Highlights

    • Net Investment Income (“NII”) increased to $0.9 million or $0.35 per share, as of March 31, 2024, from $0.6 million or $0.22 per share as of December 31, 2023.
    • Net asset value increased to $33.71 per share as of March 31, 2024, from $33.34 per share as of December 31, 2023.
    • Made approximately $9.8 million of investments and had approximately $0.9 million in repayments and sales of investments, resulting in net deployment of approximately $8.9 million during the quarter ended March 31, 2024.
    • Repurchased 20,867 of its outstanding shares of common stock during the quarter ended March 31, 2024, for an aggregate cost of approximately $0.5 million under the share repurchase program which resulted in $0.08 per share of NAV accretion.

    Subsequent Events

    • On May 7, 2024, the Company’s Board of Directors approved a second quarter distribution of $0.33 per share payable on May 31, 2024, to stockholders of record as of May 21, 2024. This represents an increase of 3% as compared to $0.32 per share distributed for the first quarter of 2024.

    Management Commentary
    Ted Goldthorpe, Chief Executive Officer and President of LRFC, said, “During the first quarter of 2024, we continued to build upon the record financial results we generated in 2023. The first quarter results are highlighted by quarter-over-quarter increases in net investment income and net asset value of 63% and 1%, respectively. Following the strong earnings we saw in 2023, Logan Ridge is off to solid start in 2024 ending the first quarter with net deployment of $8.9 million and a robust pipeline.

    Further, the strength of the Company’s financial position has allowed the Board of Directors to approve a dividend of $0.33 per share for the second quarter of 2024, which represents a 3% increase compared to the $0.32 per share distribution declared for the first quarter of 2024.

    Looking forward to the rest of 2024, we remain focused on increasing shareholder returns by leveraging the Company’s strong balance sheet, and the continued diligent deployment of capital by taking advantage of new attractive investment opportunities that we see throughout the market.”

    Selected Financial Information

    • Total investment income for the quarter ended March 31, 2024, decreased by $0.3 million, to $5.0 million, compared to $5.3 million for the first quarter of 2023.
    • Total operating expenses for the quarter ended March 31, 2024, decreased by $0.1 million, to $4.1 million, compared to $4.2 million for the first quarter of 2023.
    • Net investment income for the quarter ended March 31, 2024, was $0.9 million, or $0.35 per share, compared to $1.1 million, or $0.40 per share, for the first quarter of 2023.
    • Net asset value as of March 31, 2024, was $90.2 million, or $33.71 per share, compared to $89.2 million, or $33.34 per share, as of December 31, 2023.
    • Cash and cash equivalents as of March 31, 2024, were $8.3 million compared to $3.9 million as of December 31, 2023.
    • The investment portfolio as of March 31, 2024, consisted of investments in 62 portfolio companies with a fair value of approximately $200.1 million. This compares to 60 portfolio companies with a fair value of approximately $189.7 million as of December 31, 2023.
    • Deployment remained strong. During the first quarter, the Company made approximately $9.8 million in investments and $0.9 million in repayments and sales of investments, resulting in net deployment of approximately $8.9 million for the quarter.
    • The debt investment portfolio as of March 31, 2024, represented 80.8% of the fair value of the total portfolio, with a weighted average annualized yield of approximately 11.4% (excluding income from non-accruals and collateralized loan obligations), compared to a debt investment portfolio of approximately 82.0% with a weighted average annualized yield of approximately 11.1% (excluding income from non-accruals and collateralized loan obligations) as of December 31, 2023. As of March 31, 2024, 11.5% of the fair value of the debt investment portfolio was bearing a fixed rate of interest, compared to 13.6% of the fair value of the debt investment portfolio as of December 31, 2023.
    • Non-Accruals: As of March 31, 2024, the Company had debt investments in three portfolio companies on non-accrual status with an amortized cost and fair value of $17.2 million and $10.6 million, respectively, representing 8.3% and 5.3% of the investment portfolio’s amortized cost and fair value, respectively. This compares to debt investments in three portfolio companies on non-accrual status with an aggregate amortized cost and fair value of $17.2 million and $12.8 million, respectively, representing 8.7% and 6.9% of the investment portfolio’s amortized cost and fair value, respectively, at December 31, 2023.
    • Asset coverage ratio as of December 31, 2023 was 176%.

    Results of Operations
    Our operating results for the quarters ended March 31, 2024 and March 31, 2023 were as follows (dollars in thousands):

      For the Three Months Ended March 31, 
      2024  2023 
    Total investment income $5,003  $5,256 
    Total expenses  4,056   4,183 
    Net investment income  947   1,073 
    Net realized gain (loss) on investments  287   (1,506)
    Net change in unrealized appreciation (depreciation) on investments  675   (217)
    Net realized loss on extinguishment of debt  (58)  — 
    Net increase (decrease) in net assets resulting from operations $1,851  $(650)


    Investment income
    The composition of our investment income for the quarters ended March 31, 2024 and March 31, 2023 was as follows (dollars in thousands):

      For the Three Months Ended March 31, 
      2024  2023 
    Interest income $4,633  $4,768 
    Payment-in-kind interest  353   464 
    Dividend income  17   14 
    Other income  —   10 
    Total investment income $5,003  $5,256 


    Fair Value of Investments
    The composition of our investments as of March 31, 2024, and December 31, 2023 at amortized cost and the fair value of investments was as follows (dollars in thousands):

    March 31, 2024 Investments at
    Amortized Cost    		  Amortized Cost
    Percentage of
    Total Portfolio    		  Investments at
    Fair Value    		  Fair Value
    Percentage of
    Total Portfolio    		 
    First Lien Debt $137,088   66.5% $130,377   65.2%
    Second Lien Debt  9,155   4.4%  8,308   4.2%
    Subordinated Debt  26,573   12.9%  22,910   11.4%
    Collateralized Loan Obligations  1,701   0.8%  1,648   0.8%
    Joint Venture  386   0.2%  396   0.2%
    Equity  31,404   15.2%  36,483   18.2%
    Total $206,307   100.0% $200,122   100.0%


    December 31, 2023 Investments at
    Amortized Cost    		  Amortized Cost
    Percentage of
    Total Portfolio    		  Investments at
    Fair Value    		  Fair Value
    Percentage of
    Total Portfolio    		 
    First Lien Debt $128,537   65.4% $124,007   65.4%
    Second Lien Debt  8,968   4.6%  7,918   4.2%
    Subordinated Debt  26,573   13.5%  23,548   12.4%
    Collateralized Loan Obligations  1,600   0.8%  1,600   0.8%
    Joint Venture  440   0.2%  450   0.2%
    Equity  30,400   15.5%  32,135   17.0%
    Total $196,518   100.0% $189,658   100.0%


    Interest Rate Risk

    Based on our March 31, 2024 consolidated statements of assets and liabilities, the following table shows the annual impact on net income (excluding the potential related incentive fee impact) of base rate changes in interest rates (considering interest rate floors for variable rate securities) assuming no changes in our investment and borrowing structure (dollars in thousands):

    Basis Point ChangeIncrease
    (decrease) in
    interest income    		 (Increase)
    decrease in
    interest expense    		 Increase
    (decrease) in
    net income    		 
    Up 300 basis points$4,495 $(1,610)$2,885 
    Up 200 basis points 2,997  (1,073) 1,924 
    Up 100 basis points 1,498  (537) 961 
    Down 100 basis points (1,498) 537  (961)
    Down 200 basis points (2,997) 1,073  (1,924)
    Down 300 basis points$(4,434)$1,610 $(2,824)


    Conference Call and Webcast

    We will hold a conference call on Thursday, May 9, 2024, at 10:00 a.m. Eastern Time to discuss the first quarter 2024 financial results. Stockholders, prospective stockholders, and analysts are welcome to listen to the call or attend the webcast.

    To access the conference call, please dial (646) 307-1963 approximately 10 minutes prior to the start of the call and use the conference ID 2512637.

    A replay of this conference call will be available shortly after the live call through May 16, 2024.

    A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on our Company’s website www.loganridgefinance.com in the Investor Resources section under Events and Presentations. The webcast can also be accessed by clicking the following link: https://edge.media-server.com/mmc/p/jhfbv6fa. The online archive of the webcast will be available on the Company’s website shortly after the call.

    About Logan Ridge Finance Corporation
    Logan Ridge Finance Corporation (Nasdaq: LRFC) is a business development company that invests primarily in first lien loans and, to a lesser extent, second lien loans and equity securities issued by lower middle-market companies. The Company invests in performing, well-established middle-market businesses that operate across a wide range of industries. It employs fundamental credit analysis, targeting investments in businesses with relatively low levels of cyclicality and operating risk. For more information, visit www.loganridgefinance.com.

    About Mount Logan Capital Inc.
    Mount Logan Capital Inc. (“MLC”) is an alternative asset management company that is focused on public and private debt securities in the North American market. MLC seeks to source and actively manage loans and other debt-like securities with credit-oriented characteristics. MLC actively sources, evaluates, underwrites, manages, monitors, and primarily invests in loans, debt securities, and other credit-oriented instruments that present attractive risk-adjusted returns and present low risk of principal impairment through the credit cycle.

    About BC Partners Advisors L.P. and BC Partners Credit
    BC Partners is a leading international investment firm in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades. Today, BC Partners executives operate across markets as an integrated team through the firm's offices in North America and Europe. For more information, please visit www.bcpartners.com.

    BC Partners Credit was launched in February 2017 and has pursued a strategy focused on identifying attractive credit opportunities in any market environment and across sectors, leveraging the deal sourcing and infrastructure made available from BC Partners.

    Cautionary Statement Regarding Forward-Looking Statements

    This communication contains “forward-looking” statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include those risk factors detailed in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC.

    Any forward-looking statements speak only as of the date of this communication. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

    For additional information, contact:

    Logan Ridge Finance Corporation
    650 Madison Avenue, 23rd Floor
    New York, NY 10022

    Brandon Satoren
    Chief Financial Officer
    Brandon.Satoren@bcpartners.com
    (212) 891-2880

    Lena Cati
    The Equity Group Inc.
    lcati@equityny.com
    (212) 836-9611

    Val Ferraro
    The Equity Group Inc.
    vferraro@equityny.com
    (212) 836-9633


    Logan Ridge Finance Corporation
    Consolidated Statements of Assets and Liabilities
    (in thousands, except share and per share data)

    		 
      As of March 31,
    2024    		  As of December 31,
    2023    		 
      (unaudited)    
    ASSETS      
    Investments at fair value:      
    Non-control/non-affiliate investments (amortized cost of $180,798 and $170,972, respectively) $167,802  $161,880 
    Affiliate investments (amortized cost of $25,509 and $25,546, respectively)  32,320   27,778 
    Total investments at fair value (amortized cost of $206,307 and $196,518, respectively)  200,122   189,658 
    Cash and cash equivalents  8,335   3,893 
    Interest and dividend receivable  1,865   1,374 
    Prepaid expenses  2,013   2,163 
    Receivable for unsettled trades  167   — 
    Distribution paid in advance to transfer agent  855   — 
    Other assets  17   — 
    Total assets $213,374  $197,088 
    LIABILITIES      
    2026 Notes (net of deferred financing costs and original issue discount of $967 and $1,057, respectively) $49,033  $48,943 
    2032 Convertible Notes (net of deferred financing costs and original issue discount of $910 and $999, respectively)  13,090   14,001 
    KeyBank Credit Facility (net of deferred financing costs of $897 and $982, respectively)  52,018   38,571 
    Management and incentive fees payable  893   869 
    Distribution payable  856   — 
    Interest and financing fees payable  1,441   949 
    Accounts payable and accrued expenses  1,289   833 
    Payable for unsettled trades  4,559   3,747 
    Total liabilities $123,179  $107,913 
    Commitments and contingencies      
    NET ASSETS      
    Common stock, par value $0.01, 100,000,000 shares of common stock authorized, 2,675,936 and 2,674,698 shares of common stock issued and outstanding, respectively $27  $27 
    Capital in excess of par value  188,430   188,405 
    Total distributable earnings (loss)  (98,262)  (99,257)
    Total net assets $90,195  $89,175 
    Total liabilities and net assets $213,374  $197,088 
    Net asset value per share $33.71  $33.34 


    Logan Ridge Finance Corporation
    Consolidated Statements of Operations
    (in thousands, except share and per share data)

    		  
      For the Three Months Ended March 31,  
      2024  2023  
    INVESTMENT INCOME       
    Interest income:       
    Non-control/non-affiliate investments $4,633  $4,604  
    Affiliate investments  —   164  
    Total interest income  4,633   4,768  
    Payment-in-kind interest and dividend income:       
    Non-control/non-affiliate investments  336   416 (1)
    Affiliate investments  17   48  
    Total payment-in-kind interest and dividend income  353   464  
    Dividend income:       
    Affiliate investments  17   14  
    Total dividend income  17   14  
    Other income:       
    Non-control/non-affiliate investments  —   10  
    Total other income  —   10  
    Total investment income  5,003   5,256  
    EXPENSES       
    Interest and financing expenses  2,007   2,069  
    Base management fee  893   930  
    Directors' expense  150   135  
    Administrative service fees  201   257  
    General and administrative expenses  805   792  
    Total expenses  4,056   4,183  
    NET INVESTMENT INCOME  947   1,073  
    REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS       
    Net realized gain (loss) on investments:       
    Non-control/non-affiliate investments  287   (1,506) 
    Net realized gain (loss) on investments  287   (1,506) 
    Net change in unrealized appreciation (depreciation) on investments:       
    Non-control/non-affiliate investments  (3,904)  (1,250) 
    Affiliate investments  4,579   1,033  
    Net change in unrealized appreciation (depreciation) on investments  675   (217) 
    Total net realized and change in unrealized gain (loss) on investments  962   (1,723) 
    Net realized loss on extinguishment of debt  (58)  —  
    NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $1,851  $(650) 
    NET INCREASE (DECREASE) IN NET ASSETS PER SHARE RESULTING
    FROM OPERATIONS – BASIC    		 $0.69  $(0.24) 
    WEIGHTED AVERAGE COMMON STOCK OUTSTANDING
      – BASIC    		  2,678,342   2,710,990  
    NET INCREASE (DECREASE) IN NET ASSETS PER SHARE RESULTING
    FROM OPERATIONS – DILUTED    		 $0.65  $(0.24) 
    WEIGHTED AVERAGE COMMON STOCK OUTSTANDING
     – DILUTED    		  3,195,740   2,710,990  
    DISTRIBUTIONS PAID PER SHARE $0.32  $0.18  

    _____________________    

    (1)During the three months ended March 31, 2023, the Company received $0.2 million of non-recurring income that was paid-in-kind and included in this financial statement line item.

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