Horizon Technology Finance Announces Fourth Quarter and Full Year 2024 Financial Results
- Fourth Quarter 2024 Net Investment Income per Share of
- NAV per Share of
- Debt Portfolio Yield of
- HRZN Ends Year with Committed Backlog of
- Declares Regular Monthly Distributions Totaling
Fourth Quarter 2024 Highlights
-
Net investment income (“NII”) of
$10.4 million $0.27 $15.0 million $0.45 -
Total investment portfolio of
$697.9 million -
Net asset value of
$336.2 million $8.43 -
Annualized portfolio yield on debt investments of
14.9% for the quarter -
Horizon funded seven loans totaling
$59.1 million -
Raised total net proceeds of approximately
$18.8 million - Experienced liquidity events from five portfolio companies
-
Cash of
$100.9 million $244.0 million - Held portfolio of warrant and equity positions in 104 companies as of December 31, 2024
-
Undistributed spillover income of
$1.06 -
Subsequent to quarter end, declared distributions of
$0.11 - The Company’s investment adviser agreed to waive the portion of its quarterly income incentive fee, if any, if and to the extent that, after payment of such portion, the Company’s net investment income per share for such quarter would be less than the quarterly distribution per share declared in such quarter. The income incentive fee waiver will be effective commencing with the quarter ending March 31, 2025 and terminating with the quarter ending December 31, 2025.
Full Year 2024 Highlights
-
Net investment income of
$47.8 million $1.32 $61.4 million $1.98 -
Net investment income of
$1.32 $1.32 -
Achieved annual portfolio yield on debt investments of
15.6% for 2024 -
Horizon funded 25 loans totaling
$197.2 million
“We grew the size of our portfolio for the second consecutive quarter through a number of new, high-quality loans, while the NII of
Fourth Quarter 2024 Operating Results
Total investment income for the quarter ended December 31, 2024 was
The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended December 31, 2024 and 2023 was
Total expenses for the quarter ended December 31, 2024 were
Net investment income for the quarter ended December 31, 2024 was
For the quarter ended December 31, 2024, net realized loss on investments was
For the quarter ended December 31, 2024, net unrealized depreciation on investments was
Full Year 2024 Operating Results
Total investment income for the year ended December 31, 2024 was
Horizon’s dollar-weighted annualized yield on average debt investments for the year ended December 31, 2024 and 2023 was
For the full year ended December 31, 2024, net investment income was
For the full year ended December 31, 2024, net realized loss on investments was
For the full year ended December 31, 2024, net unrealized depreciation on investments was
Portfolio Summary and Investment Activity
As of December 31, 2024, the Company’s debt portfolio consisted of 52 secured loans with an aggregate fair value of
($ in thousands) |
For the Three Months Ended December 31, |
|
For the Year Ended December 31, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Beginning portfolio |
$ |
684,000 |
|
$ |
729,053 |
|
$ |
709,085 |
|
$ |
720,026 |
|
||||
|
|
|
|
|
||||||||||||
New debt and equity investments |
|
69,273 |
|
|
64,201 |
|
|
210,024 |
|
|
251,189 |
|
||||
|
|
|
|
|
||||||||||||
Less refinanced debt balances |
|
(8,120 |
) |
|
— |
|
|
(27,660 |
) |
|
(32,500 |
) |
||||
|
|
|
|
|
||||||||||||
Net new debt and equity investments |
|
61,153 |
|
|
64,201 |
|
|
182,364 |
|
|
218,689 |
|
||||
|
|
|
|
|
||||||||||||
Principal payments received on investments |
|
(12,191 |
) |
|
(13,247 |
) |
|
(46,996 |
) |
|
(35,258 |
) |
||||
|
|
|
|
|
||||||||||||
Early pay-offs and principal paydowns |
|
(13,721 |
) |
|
(48,824 |
) |
|
(99,364 |
) |
|
(117,035 |
) |
||||
|
|
|
|
|
||||||||||||
Payment-in-kind interest on investments |
|
1,145 |
|
|
2,345 |
|
|
3,261 |
|
|
8,433 |
|
||||
|
|
|
|
|
||||||||||||
Accretion of debt investment fees |
|
1,372 |
|
|
1,844 |
|
|
5,842 |
|
|
6,862 |
|
||||
|
|
|
|
|
||||||||||||
New debt investment fees |
|
(829 |
) |
|
(765 |
) |
|
(2,918 |
) |
|
(3,162 |
) |
||||
|
|
|
|
|
||||||||||||
Warrants and equity received in settlement of fee income |
|
— |
|
|
— |
|
|
359 |
|
|
169 |
|
||||
|
|
|
|
|
||||||||||||
Proceeds from sale of investments |
|
(145 |
) |
|
(3 |
) |
|
(302 |
) |
|
(11,066 |
) |
||||
|
|
|
|
|
||||||||||||
Net realized loss on investments |
|
(3,209 |
) |
|
(1,189 |
) |
|
(34,631 |
) |
|
(29,702 |
) |
||||
Net unrealized depreciation on investments |
|
(19,649 |
) |
|
(24,332 |
) |
|
(18,785 |
) |
|
(48,780 |
) |
||||
|
|
|
|
|
||||||||||||
Other |
|
(35 |
) |
|
2 |
|
|
(24 |
) |
|
(91 |
) |
||||
|
|
|
|
|
||||||||||||
Ending portfolio |
$ |
697,891 |
|
$ |
709,085 |
|
$ |
697,891 |
|
$ |
709,085 |
|
||||
Portfolio Asset Quality
The following table shows the classification of Horizon’s loan portfolio at fair value by internal credit rating as of December 31, 2024, September 30, 2024 and December 31, 2023:
($ in thousands) |
December 31, 2024 |
|
September 30, 2024 |
|
December 31, 2023 |
||||||||||||
|
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 |
11 |
$ |
159,944 |
25.1 |
% |
|
10 |
$ |
129,508 |
20.5 |
% |
|
11 |
$ |
150,367 |
22.4 |
% |
3 |
30 |
|
419,621 |
65.7 |
% |
|
34 |
|
449,085 |
70.9 |
% |
|
39 |
|
452,911 |
67.6 |
% |
2 |
7 |
|
48,760 |
7.6 |
% |
|
6 |
|
33,465 |
5.3 |
% |
|
2 |
|
39,343 |
5.9 |
% |
1 |
4 |
|
10,454 |
1.6 |
% |
|
3 |
|
21,226 |
3.3 |
% |
|
4 |
|
27,551 |
4.1 |
% |
Total |
52 |
$ |
638,779 |
100.0 |
% |
|
53 |
$ |
633,284 |
100.0 |
% |
|
56 |
$ |
670,172 |
100.0 |
% |
As of December 31, 2024, September 30, 2024 and December 31, 2023, Horizon’s loan portfolio had a weighted average credit rating of 3.1, 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 December 31, 2024, there were four debt investments with an internal credit rating of 1, with an aggregate cost of
Liquidity and Capital Resources
As of December 31, 2024, the Company had
As of December 31, 2024, there was no outstanding principal balance under the
As of December 31, 2024, there was
Additionally, as of December 31, 2024, there was
Horizon Funding Trust 2022-1, a wholly-owned subsidiary of Horizon, previously issued
On October 17, 2024, the Company entered into a note purchase agreement in connection with the issuance sale of
The Convertible Notes mature on October 17, 2031, unless earlier converted or repurchased in accordance with their terms. The Convertible Notes bear interest at a rate of
During the three months ended December 31, 2024, the Company sold 2,020,954 shares of common stock under its ATM offering program with Goldman Sachs & Co. LLC and B. Riley FBR, Inc (the “ATM Program”). The Company received total accumulated net proceeds of approximately
As of December 31, 2024, the Company’s percentage of debt net of cash to equity was
Liquidity Events
During the quarter ended December 31, 2024, Horizon experienced liquidity events from five portfolio companies. Liquidity events for Horizon may consist of the sale of warrants or equity in portfolio companies, loan prepayments, sale of owned assets or receipt of success fees.
In October, Camp NYC, Inc. (“Camp NYC”) paid its outstanding principal balance of
In November, Clara Foods Co. (“Clara Foods”) prepaid its outstanding principal balance of
In November, HRZN received a payment of
In November, Reputation Institute, Inc. was acquired by Periscope Equity, and Reputation Institute, Inc. prepaid its outstanding principal balance of
In December, Lytics, Inc. (“Lytics”) prepaid its outstanding principal balance of
Net Asset Value
At December 31, 2024, the Company’s net assets were
For the quarter ended December 31, 2024, net decrease in net assets resulting from operations was
Stock Repurchase Program
During the quarter ended December 31, 2024, the Company did not repurchase any shares of its common stock. From the inception of the stock repurchase program through December 31, 2024, the Company has repurchased 167,465 shares of its common stock at an average price of
Recent Developments
On January 2, 2025, the Company funded a
On January 9, 2025, the Company purchased, from a co-lender, a debt investment to an existing portfolio company, Hound Labs, Inc., with a principal balance of
On January 10, 2025, the Company funded a
On January 15, 2025, the Company funded a
Between January 3 and January 23, 2025, the Company sold 404,305 shares of common stock under the ATM Program. For the same period, the Company received total accumulated net proceeds of approximately
On January 31, 2025, the Company funded a
Between February 11 and 25, 2025 the Company funded a
At a special meeting of the stockholders convened on February 21, 2025, stockholders, upon the recommendation of the Board, approved a new investment management agreement with Horizon Technology Financial Management LLC, the investment advisor to the Company (“HTFM”), the terms of which are identical to those contained in the Investment Management Agreement. The new investment management agreement will become effective, if and when, Wendel Group (Euronext: MF:FP) (“Wendel”) acquires a controlling interest in Monroe Capital LLC (“Monroe Capital”), and indirectly in HTFM.
On February 25, 2025, the Company funded a
On February 27, 2025, the Company funded a
On February 28, 2025, the Company funded a
On March 4, 2025, Candesant Biomedical, Inc. prepaid its outstanding principal balance of
Monthly Distributions Declared in First Quarter 2025
On February 28, 2025, the Company’s board of directors declared monthly distributions of
Monthly Distributions
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
March 17, 2025 |
March 17, 2025 |
April 15, 2025 |
|
April 16, 2025 |
April 16, 2025 |
May 15, 2025 |
|
May 16, 2025 |
May 16, 2025 |
June 13, 2025 |
|
|
|
Total: |
|
After paying distributions of
When declaring distributions, Horizon’s 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, March 5, 2025, 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 13750505. 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 at www.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), externally managed by Horizon Technology Finance Management LLC, an affiliate of Monroe Capital, 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 Horizon 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 is headquartered in
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 Horizon’s filings with the Securities and Exchange Commission. Horizon 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.
Horizon Technology Finance Corporation and Subsidiaries Consolidated Statements of Assets and Liabilities (Dollars in thousands, except share and per share data) |
||||||||
|
|
December 31, |
|
December 31, |
||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
||||||
Assets |
|
|
||||||
Non-affiliate investments at fair value (cost of |
$ |
657,765 |
|
$ |
693,730 |
|
||
Non-controlled affiliate investments at fair value (cost of |
|
8,307 |
|
|
1,132 |
|
||
Controlled affiliate investments at fair value (cost of |
|
31,819 |
|
|
14,223 |
|
||
Total investments at fair value (cost of |
|
697,891 |
|
|
709,085 |
|
||
Cash |
|
70,264 |
|
|
46,630 |
|
||
Investments in money market funds |
|
27,266 |
|
|
26,450 |
|
||
Restricted investments in money market funds |
|
3,338 |
|
|
2,642 |
|
||
Interest receivable |
|
16,559 |
|
|
13,926 |
|
||
Other assets |
|
6,515 |
|
|
3,623 |
|
||
Total assets |
$ |
821,833 |
|
$ |
802,356 |
|
||
|
|
|
||||||
Liabilities |
|
|
||||||
Borrowings |
$ |
467,904 |
|
$ |
462,235 |
|
||
Distributions payable |
|
13,159 |
|
|
11,011 |
|
||
Base management fee payable |
|
1,045 |
|
|
1,052 |
|
||
Other accrued expenses |
|
3,542 |
|
|
4,077 |
|
||
Total liabilities |
|
485,650 |
|
|
478,375 |
|
||
|
|
|
||||||
Commitments and contingencies |
|
|
||||||
|
|
|
||||||
Net assets |
|
|
||||||
Preferred stock, par value |
|
— |
|
|
— |
|
||
Common stock, par value |
|
44 |
|
|
36 |
|
||
Paid-in capital in excess of par |
|
518,200 |
|
|
450,949 |
|
||
Distributable loss |
|
(182,061 |
) |
|
(127,004 |
) |
||
Total net assets |
|
336,183 |
|
|
323,981 |
|
||
Total liabilities and net assets |
$ |
821,833 |
|
$ |
802,356 |
|
||
Net asset value per common share |
$ |
8.43 |
|
$ |
9.71 |
|
||
Horizon Technology Finance Corporation and Subsidiaries Consolidated Statements of Operations (Dollars in thousands, except share and per share data) |
||||||||||||||||
|
|
|
||||||||||||||
|
For the Three Months Ended |
For the Year Ended |
||||||||||||||
|
December 31, |
December 31, |
||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Investment income |
|
|
|
|
||||||||||||
From non-affiliate investments: |
|
|
|
|
||||||||||||
Interest income |
$ |
22,039 |
|
$ |
24,739 |
|
$ |
93,588 |
|
$ |
100,435 |
|
||||
Fee income |
|
287 |
|
|
1,090 |
|
|
2,948 |
|
|
3,345 |
|
||||
Payment-in-kind income |
|
76 |
|
|
2,183 |
|
|
1,630 |
|
|
8,113 |
|
||||
From non-controlled affiliate investments: |
|
|
|
|
||||||||||||
Interest income |
|
— |
|
|
— |
|
|
— |
|
|
1,245 |
|
||||
From controlled affiliate investments: |
|
|
|
|
||||||||||||
Interest income |
|
72 |
|
|
9 |
|
|
118 |
|
|
17 |
|
||||
Payment-in-kind income |
|
1,071 |
|
|
162 |
|
|
1,631 |
|
|
320 |
|
||||
Total investment income |
|
23,545 |
|
|
28,183 |
|
|
99,915 |
|
|
113,475 |
|
||||
Expenses |
|
|
|
|
||||||||||||
Interest expense |
|
8,210 |
|
|
7,564 |
|
|
32,256 |
|
|
28,971 |
|
||||
Base management fee |
|
3,083 |
|
|
3,178 |
|
|
12,261 |
|
|
12,799 |
|
||||
Performance based incentive fee |
|
— |
|
|
— |
|
|
295 |
|
|
3,094 |
|
||||
Administrative fee |
|
391 |
|
|
409 |
|
|
1,650 |
|
|
1,658 |
|
||||
Professional fees |
|
621 |
|
|
620 |
|
|
2,328 |
|
|
2,178 |
|
||||
General and administrative |
|
447 |
|
|
453 |
|
|
1,866 |
|
|
1,837 |
|
||||
Total expenses |
|
12,752 |
|
|
12,224 |
|
|
50,656 |
|
|
50,537 |
|
||||
Net investment income before excise tax |
|
10,793 |
|
|
15,959 |
|
|
49,259 |
|
|
62,938 |
|
||||
Provision for excise tax |
|
367 |
|
|
948 |
|
|
1,476 |
|
|
1,490 |
|
||||
Net investment income |
|
10,426 |
|
|
15,011 |
|
|
47,783 |
|
|
61,448 |
|
||||
Net realized and unrealized loss |
|
|
|
|
||||||||||||
Net realized loss on non-affiliate investments |
|
(3,209 |
) |
|
(1,189 |
) |
|
(34,668 |
) |
|
(29,702 |
) |
||||
Net realized gain on non-controlled affiliate investments |
|
— |
|
|
— |
|
|
37 |
|
|
— |
|
||||
Net realized loss on investments |
|
(3,209 |
) |
|
(1,189 |
) |
|
(34,631 |
) |
|
(29,702 |
) |
||||
Net realized loss on extinguishment of debt |
|
— |
|
|
(151 |
) |
|
— |
|
|
(151 |
) |
||||
Net realized loss |
|
(3,209 |
) |
|
(1,340 |
) |
|
(34,631 |
) |
|
(29,853 |
) |
||||
Net unrealized depreciation on non-affiliate investments |
|
(12,297 |
) |
|
(16,833 |
) |
|
(14,392 |
) |
|
(24,489 |
) |
||||
Net unrealized (depreciation) appreciation on non-controlled affiliate investments |
|
(13 |
) |
|
(8,364 |
) |
|
8,361 |
|
|
(26,513 |
) |
||||
Net unrealized (depreciation) appreciation on controlled affiliate investments |
|
(7,339 |
) |
|
865 |
|
|
(12,754 |
) |
|
2,222 |
|
||||
Net unrealized depreciation on investments |
|
(19,649 |
) |
|
(24,332 |
) |
|
(18,785 |
) |
|
(48,780 |
) |
||||
Net realized and unrealized loss |
|
(22,858 |
) |
|
(25,672 |
) |
|
(53,416 |
) |
|
(78,633 |
) |
||||
Net decrease in net assets resulting from operations |
$ |
(12,432 |
) |
$ |
(10,661 |
) |
$ |
(5,633 |
) |
$ |
(17,185 |
) |
||||
Net investment income per common share - basic |
$ |
0.27 |
|
$ |
0.45 |
|
$ |
1.32 |
|
$ |
1.98 |
|
||||
Net investment income per common share - diluted |
$ |
0.27 |
|
$ |
0.45 |
|
$ |
1.32 |
|
$ |
1.98 |
|
||||
Net decrease in net assets resulting from operations per common share - basic |
$ |
(0.32 |
) |
$ |
(0.32 |
) |
$ |
(0.16 |
) |
$ |
(0.56 |
) |
||||
Net decrease in net assets resulting from operations per common share - diluted |
$ |
(0.32 |
) |
$ |
(0.32 |
) |
$ |
(0.16 |
) |
$ |
(0.56 |
) |
||||
Weighted average shares outstanding - basic |
|
38,797,437 |
|
|
33,339,363 |
|
|
36,104,415 |
|
|
30,957,849 |
|
||||
Weighted average shares outstanding - diluted |
|
38,797,437 |
|
|
33,339,363 |
|
|
36,104,415 |
|
|
30,957,849 |
|
||||
Distributions declared per share |
$ |
0.33 |
|
$ |
0.38 |
|
$ |
1.37 |
|
$ |
1.37 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250304141240/en/
Investor Relations:
ICR
Garrett Edson
ir@horizontechfinance.com
(646) 200-8885
Media Relations:
ICR
Chris Gillick
HorizonPR@icrinc.com
(646) 677-1819
Source: Horizon Technology Finance Corporation
