PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Quarter Ended June 30, 2024
Rhea-AI Summary
PennantPark Floating Rate Capital (PFLT) reported its Q3 2024 financial results for the period ending June 30, 2024. The company's investment portfolio reached $1,658.9 million, with net assets at $816.7 million and a GAAP net asset value per share of $11.34. Net investment income was $21.2 million or $0.31 per share. PFLT declared a distribution of $0.31 per share.
Investment income for the quarter was $48.5 million. The portfolio saw purchases of investments totaling $320.9 million and sales and repayments of $137.6 million. The PSSL portfolio was valued at $904.2 million. Net realized gains were $(0.4) million, while net change in unrealized appreciation (depreciation) was $(4.0) million.
Total expenses for the quarter were $27.3 million, up from $19.2 million in the same period last year, primarily due to higher interest expenses and management fees. PFLT's portfolio had three companies on non-accrual, representing 1.5% and 1.1% of the portfolio on a cost and fair value basis, respectively.
Positive
- Net investment income of $21.2 million or $0.31 per share.
- Investment portfolio value increased to $1,658.9 million from $1,067.2 million.
- Total investment income rose to $48.5 million from $37.7 million.
- Net assets grew to $816.7 million, with GAAP NAV per share of $11.34.
Negative
- Net realized losses of $(0.4) million for the quarter.
- Net change in unrealized appreciation (depreciation) was $(4.0) million.
- Total expenses increased to $27.3 million from $19.2 million.
- Three portfolio companies remained on non-accrual, affecting 1.1% of portfolio value.
Insights
PennantPark Floating Rate Capital's Q3 2024 results show solid performance amid a challenging market. Key highlights:
- Net investment income increased to
$21.2 million ($0.31 per share) from$18.5 million in Q3 2023. - Investment portfolio grew to
$1.66 billion , up55.4% year-over-year. - Weighted average yield on debt investments remained strong at
12.1% .
The company's focus on first lien secured debt (
PennantPark's Q3 results reflect a strategic positioning in the current market environment:
- Increased investment activity:
$320.9 million invested in Q3, focusing on high-quality middle market loans. - Diversification: Portfolio now spans 151 companies, reducing single-name risk.
- Yield optimization:
12.1% weighted average yield on debt investments indicates selective, high-return deployments.
The company's proactive approach to growing investment capacity positions it well for increased income. However, investors should note the slight uptick in non-accruals to
From a risk perspective, PennantPark's Q3 results present a mixed picture:
- Positives: 100% variable-rate debt portfolio provides a hedge against rising rates. Strong liquidity with
$84.6 million in cash and$392.1 million in unused credit facility capacity. - Concerns: Increased leverage (1.11x regulatory debt to equity) and growth in non-accruals to
1.5% of portfolio at cost.
The refinancing of the 2031 Asset-Backed Debt post-quarter-end to
MIAMI, Aug. 07, 2024 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) announced today its financial results for the third quarter ended June 30, 2024.
| HIGHLIGHTS Quarter ended June 30, 2024 (Unaudited) ($ in millions, except per share amounts) | ||||||
| Assets and Liabilities: | ||||||
| Investment portfolio (1) | $ | 1,658.9 | ||||
| Net assets | $ | 816.7 | ||||
| GAAP net asset value per share | $ | 11.34 | ||||
| Quarterly increase in GAAP net asset value per share | (0.5 | )% | ||||
| Adjusted net asset value per share (2) | $ | 11.34 | ||||
| Quarterly increase in adjusted net asset value per share (2) | (0.5 | )% | ||||
| Credit Facility | $ | 218.9 | ||||
| 2036 Asset-Backed Debt | $ | 284.0 | ||||
| 2031 Asset-Backed Debt | $ | 209.9 | ||||
| 2026 Notes | $ | 183.6 | ||||
| Regulatory debt to equity | 1.11x | |||||
| Weighted average yield on debt investments at quarter-end | 12.1 | % | ||||
| Operating Results: | ||||||
| Net investment income | $ | 21.2 | ||||
| Net investment income per share (GAAP) | $ | 0.31 | ||||
| Core net investment income per share (3) | $ | 0.31 | ||||
| Distributions declared per share | $ | 0.31 | ||||
| Portfolio Activity: | ||||||
| Purchases of investments | $ | 320.9 | ||||
| Sales and repayments of investments | $ | 137.6 | ||||
| PSSL Portfolio data: | ||||||
| PSSL investment portfolio | $ | 904.2 | ||||
| Purchases of investments | $ | 84.5 | ||||
| Sales and repayments of investments | $ | 47.0 | ||||
_______________________
| (1) | Includes investments in PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture, totaling |
| (2) | This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance excluding the impact of the unrealized amounts on the Company's multi-currency senior secured revolving credit facility with Truist Bank and the other lenders (the "Credit Facility"). The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. |
| (3) | Core net investment income (“Core NII”) is a non-GAAP financial measure. The Company believes that Core NII provides useful information to investors and management because it reflects the Company's financial performance excluding one-time or non-recurring investment income and expenses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the quarter ended June 30 2024, there were no one-time events resulting in |
CONFERENCE CALL AT 9:00 A.M. ET ON AUGUST 8, 2024
The Company will also host a conference call at 9:00 a.m. (Eastern Time) on Thursday August 8, 2024 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (888) 204-4368 approximately 5-10 minutes prior to the call. International callers should dial (646) 828-8193 All callers should reference conference ID #5158165 or PennantPark Floating Rate Capital Ltd. An archived replay will also be available on a webcast link located on the Quarterly Earnings page in the Investor section of PennantPark’s website.
PORTFOLIO AND INVESTMENT ACTIVITY
“We are pleased to have another quarter of solid performance. We are actively investing in this strong vintage of new core middle market loans,” said Art Penn, Chairman and CEO. “We have been proactively growing PFLT's investment capacity in order to best position the company for meaningfully increased income.”
As of June 30, 2024, our portfolio totaled
As of September 30, 2023, our portfolio totaled
For the three months ended June 30, 2024, we invested
PennantPark Senior Secured Loan Fund I LLC
As of June 30, 2024, PSSL’s portfolio totaled
For the three months ended June 30, 2024, PSSL invested
RESULTS OF OPERATIONS
Set forth below are the results of operations for the three and nine months ended June 30, 2024 and 2023.
Investment Income
For the three and nine months ended June 30, 2024, investment income was
Expenses
For the three and nine months ended June 30, 2024, expenses totaled
Net Investment Income
For the three and nine months ended June 30, 2024, net investment income totaled
Net Realized Gains or Losses
For the three and nine months ended June 30, 2024, net realized gains (losses) totaled
Unrealized Appreciation or Depreciation on Investments and Debt
For the three and nine months ended June 30, 2024, we reported net change in unrealized appreciation (depreciation) on investments of
For the three and nine months ended June 30, 2024, our Credit Facility had a net change in unrealized appreciation (depreciation) of less than
Net Change in Net Assets Resulting from Operations
For the three and nine months ended June 30, 2024, net increase (decrease) in net assets resulting from operations totaled
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources are derived primarily from cash flows from operations, including income earned, proceeds from investment sales and repayments, and proceeds of securities offerings and debt financings. Our primary use of funds from operations includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from our portfolio and proceeds from public and private offerings of securities to finance our investment objectives and operations.
As of June 30, 2024 and September 30, 2023, we had
As of June 30, 2024 and September 30, 2023, we had cash equivalents of
For the nine months ended June 30, 2024, our operating activities used cash of
For the nine months ended June 30, 2023, our operating activities provided cash of
DISTRIBUTIONS
During the three and nine months ended June 30, 2024, we declared distributions of
RECENT DEVELOPMENTS
On July 25, 2024, we completed the refinancing of the 2031 Asset-Backed Debt from a
For the period subsequent to June 30, 2024 through August 2, 2024, we invested
AVAILABLE INFORMATION
The Company makes available on its website its Quarterly Report on Form 10-Q filed with the SEC, and stockholders may find such report on its website at www.pennantpark.com.
| PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except per share data) (Unaudited) | ||||||||
| June 30, 2024 (Unaudited) | September 30, 2023 | |||||||
| Assets | ||||||||
| Investments at fair value | ||||||||
| Non-controlled, non-affiliated investments (amortized cost— | $ | 1,314,452 | $ | 772,178 | ||||
| Controlled, affiliated investments (amortized cost— | 344,492 | 294,996 | ||||||
| Total investments (amortized cost— | 1,658,944 | 1,067,174 | ||||||
| Cash and cash equivalents (cost— | 84,590 | 100,555 | ||||||
| Interest receivable | 12,510 | 10,423 | ||||||
| Distributions receivable | 635 | 565 | ||||||
| Due from affiliate | 65 | — | ||||||
| Prepaid expenses and other assets | 152 | 894 | ||||||
| Total assets | 1,756,896 | 1,179,611 | ||||||
| Liabilities | ||||||||
| Credit Facility payable, at fair value (cost— | 218,862 | 9,400 | ||||||
| 2036 Asset-Backed Debt, net (par— | 283,951 | — | ||||||
| 2031 Asset-Backed Debt, net (par— | 209,931 | 226,759 | ||||||
| 2026 Notes payable, net (par— | 183,637 | 183,054 | ||||||
| Interest payable on debt | 15,119 | 8,615 | ||||||
| Distributions payable | 7,380 | 6,020 | ||||||
| Payable for investments purchased | 9,201 | 4,905 | ||||||
| Incentive fee payable | 5,307 | 4,628 | ||||||
| Base management fee payable | 3,908 | 2,759 | ||||||
| Deferred tax liability | 1,564 | 1,794 | ||||||
| Accounts payable and accrued expenses | 1,310 | 1,287 | ||||||
| Due to affiliates | — | 566 | ||||||
| 2023 Notes payable, at fair value (par— | — | 76,219 | ||||||
| Total liabilities | 940,170 | 526,006 | ||||||
| Net assets | ||||||||
| Common stock, 71,998,138 and 58,734,702 shares issued and outstanding, respectively Par value | 72 | 59 | ||||||
| Paid-in capital in excess of par value | 915,684 | 765,187 | ||||||
| Accumulated deficit | (99,030 | ) | (111,641 | ) | ||||
| Total net assets | $ | 816,726 | $ | 653,605 | ||||
| Total liabilities and net assets | $ | 1,756,896 | $ | 1,179,611 | ||||
| Net asset value per share | $ | 11.34 | $ | 11.13 | ||||
| PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Investment income: | ||||||||||||||||
| From non-controlled, non-affiliated investments: | ||||||||||||||||
| Interest | $ | 34,456 | $ | 21,988 | $ | 88,693 | $ | 65,440 | ||||||||
| Dividend | 768 | 4,390 | 1,853 | 5,602 | ||||||||||||
| Other income | 591 | 734 | 3,622 | 1,460 | ||||||||||||
| From controlled, affiliated investments: | ||||||||||||||||
| Interest | 8,841 | 8,151 | 25,595 | 22,701 | ||||||||||||
| Dividend | 3,719 | 2,450 | 10,938 | 8,400 | ||||||||||||
| Other income | 130 | — | 130 | — | ||||||||||||
| Total investment income | 48,505 | 37,713 | 130,831 | 103,603 | ||||||||||||
| Expenses: | ||||||||||||||||
| Interest and expenses on debt | 16,293 | 9,985 | 39,923 | 29,595 | ||||||||||||
| Performance-based incentive fee | 5,307 | 4,625 | 14,937 | 12,245 | ||||||||||||
| Base management fee | 3,908 | 2,840 | 10,283 | 8,643 | ||||||||||||
| General and administrative expenses | 1,050 | 1,134 | 3,293 | 2,545 | ||||||||||||
| Administrative services expenses | 450 | 477 | 1,661 | 764 | ||||||||||||
| Expenses before provision for taxes and financing costs | 27,008 | 19,061 | 70,097 | 53,792 | ||||||||||||
| Provision for taxes on net investment income | 193 | 150 | 894 | 834 | ||||||||||||
| Credit Facility amendment costs | 94 | — | 94 | — | ||||||||||||
| Total expenses | 27,295 | 19,211 | 71,085 | 54,626 | ||||||||||||
| Net investment income | 21,210 | 18,502 | 59,746 | 48,977 | ||||||||||||
| Realized and unrealized gain (loss) on investments and debt: | ||||||||||||||||
| Net realized gain (loss) on: | ||||||||||||||||
| Non-controlled, non-affiliated investments | (353 | ) | (6,065 | ) | 568 | (13,520 | ) | |||||||||
| Non-controlled and controlled, affiliated investments | — | — | — | — | ||||||||||||
| Provision for taxes on realized gain on investments | — | — | — | (300 | ) | |||||||||||
| Net realized gain (loss) on investments | (353 | ) | (6,065 | ) | 568 | (13,820 | ) | |||||||||
| Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
| Non-controlled, non-affiliated investments | (1,064 | ) | 3,051 | 7,443 | (12,204 | ) | ||||||||||
| Controlled and non-controlled, affiliated investments | (2,889 | ) | (4,143 | ) | 2,519 | (9,825 | ) | |||||||||
| Provision for taxes on unrealized appreciation (depreciation) on investments | — | — | 230 | 2,929 | ||||||||||||
| Debt (appreciation) depreciation | 16 | (5,752 | ) | (7 | ) | (4,842 | ) | |||||||||
| Net change in unrealized appreciation (depreciation) on investments and debt | (3,937 | ) | (6,844 | ) | 10,185 | (23,942 | ) | |||||||||
| Net realized and unrealized gain (loss) from investments and debt | (4,290 | ) | (12,909 | ) | 10,753 | (37,762 | ) | |||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 16,920 | $ | 5,593 | $ | 70,499 | $ | 11,215 | ||||||||
| Net increase (decrease) in net assets resulting from operations per common share | $ | 0.25 | $ | 0.11 | $ | 1.12 | $ | 0.23 | ||||||||
| Net investment income per common share | $ | 0.31 | $ | 0.36 | $ | 0.95 | $ | 1.02 | ||||||||
ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.
PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.
ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC
PennantPark Investment Advisers, LLC is a leading middle-market credit platform, managing
FORWARD-LOOKING STATEMENTS AND OTHER
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance 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 filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.
We may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations.
The information contained herein is based on current tax laws, which may change in the future. The Company cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in this material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.
| CONTACT: | Richard T. Allorto, Jr. |
| PennantPark Floating Rate Capital Ltd. | |
| (212) 905-1000 | |
| www.pennantpark.com |
FAQ
What were PennantPark Floating Rate Capital 's (PFLT) financial results for Q3 2024?
What was the GAAP net asset value per share for PFLT in Q3 2024?
How much did PFLT declare in distributions per share for Q3 2024?
What was PFLT's net investment income per share for Q3 2024?
What were the total investment income and expenses for PFLT in Q3 2024?
How many portfolio companies were on non-accrual for PFLT in Q3 2024?
