Solar Capital Ltd. Announces Quarter Ended March 31, 2018 Financial Results; Net Investment Income Per Share of $0.45; Declares Quarterly Distribution of $0.41 Per Share for Q2, 2018
As a reminder, the Company’s Board of Directors recently approved a voluntary 25 basis point permanent reduction in the investment advisor’s management fee, effective
Comprehensive Investment portfolio* fair value:
Number of portfolio companies: 238
Net asset value per share:
Comprehensive Investment Portfolio Activity** for the Quarter Ended
Investments made during the quarter:
Investments prepaid and sold during the quarter:
Operating Results for the Quarter Ended
Net investment income:
Net investment income per share:
Net realized and unrealized gain:
Net increase in net assets from operations:
Earnings per share:
* The Comprehensive Investment Portfolio is comprised of Solar Capital Ltd.’s investment portfolio, Crystal Financial’s full portfolio (including its ownership of its SBIC),
** Includes investment activity through Crystal Financial, NEF, and SSLP and SSLP II, attributable to the Company.
“Our first quarter results continue our history of delivering strong credit quality, NAV preservation, and earnings power,” said
Conference Call and Webcast; Postponement of Annual Stockholder Meeting
The Company will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Tuesday, May 8, 2018. All interested parties may participate in the conference call by dialing (844) 889-7786 approximately 5-10 minutes prior to the call, international callers should dial (661) 378-9930. Participants should reference Solar Capital Ltd. and the participant passcode of 6089719 when prompted. A telephone replay will be available until May 23, 2018 and can be accessed by dialing (855) 859-2056 and using the passcode 6089719. International callers should dial (404) 537-3406. This conference call will also be broadcast live over the Internet and can be accessed by all interested parties through Solar Capital’s website, www.solarcapltd.com. To listen to the webcast, please go to the Company's website prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay of the webcast will be available soon after the call.
The Company’s board of directors has also postponed the date of the Company’s 2018 Annual Meeting of Stockholders to later in 2018 from the date (
Comprehensive Investment Portfolio
During the three months ended
|Comprehensive Investment Portfolio Activity(1)
|Asset Class||Cash Flow
Loans / Crystal Financial(3)
Financings / NEF(4)
|Q1 2018 Originations||$30.1
Repayments / Amortization
|Net Portfolio Activity||($34.3)
(1) Total Portfolio Activity includes gross originations/repayments across each business unit, attributable to SLRC.
(2) Includes cash flow loans on the Company’s balance sheet and in the SSLP’s.
(3) Includes Crystal Financial’s full portfolio (and its ownership of its SBIC) and asset-based loans on the Company’s balance sheet.
(4) Includes NEF’s full portfolio and NEF equipment financings on the Company’s balance sheet.
Our Comprehensive Investment Portfolio composition by business unit at
|Comprehensive Investment Portfolio Composition
(at fair value)
|Cash Flow Senior Secured Loans(1)||$680.6||37.9%
|Asset-Based Senior Secured Loans / Crystal Financial(2)||$525.3||29.2%
|Equipment Senior Secured Financings / NEF(3)||$321.9||17.9%
|Life Science Senior Secured Loans||$238.2||13.2%
|Total Senior Secured Loans||$1,766.0||98.2%
|Equity and Equity-like Securities(4)||$31.8||1.8%
|Total Comprehensive Investment Portfolio||$1,797.8||100%
|Floating Rate Investments(5)||$1,431.1||80.5%
|First Lien Senior Secured Loans||$1,419.4||78.9%
|Second Lien Senior Secured Loans||$346.6||19.3%
(1) Includes cash flow loans on the Company’s balance sheet and in the SSLP’s.
(2) Includes Crystal Financial’s full portfolio and asset-based loans on the Company’s balance sheet.
(3) Includes NEF’s full portfolio and NEF equipment financings on the Company’s balance sheet.
(4) Excludes Crystal, NEF, SSLP and SSLP II membership interests, which distribute quarterly dividends to the Company.
(5) Floating rate investments calculated as a percent of the Company’s income-producing Comprehensive Investment Portfolio. The majority of fixed rate loans are associated with NEF and are short in duration with average hold periods of 2.5 years. Additionally, NEF seeks to match-fund its fixed rate assets with fixed rate liabilities.
(6) Excludes the impact of success fees and/or warrants.
The Comprehensive Investment Portfolio is diversified across over 237 unique issuers across approximately 80 industries and with an average exposure of
Weighted Average Yield
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, with one representing the least amount of risk.
|Internal Investment Rating||Investments at Fair Value||% of Total Portfolio|
For the quarters ended
Investment Income Contribution by Business Unit
|Business Unit Contribution to Gross Investment Income(1)
(1) Includes income/fees from cash flow loans on balance sheet and distributions from the SSLP’s, income/fees from asset based loans on balance sheet and distributions from Crystal Financial, income/fees from equipment financings and distributions from NEF, and income/fees from life science loans.
Solar Capital Ltd.’s Results of Operations for the Quarter Ended
For the fiscal quarters ended
Net expenses totaled
Net Investment Income
The Company’s net investment income totaled
Net Realized and Unrealized Gain
Net realized and unrealized gains for the fiscal quarters ended
Net Increase in Net Assets Resulting From Operations
For the fiscal quarters ended
Liquidity and Capital Resources
When including SSLP, SSLP II, Crystal Financial, NEF, and the
Financial Statements and Tables
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share amounts)
|March 31, 2018 (unaudited)
||December 31, 2017|
|Investments at fair value:|
|Companies less than 5% owned (cost: $835,765 and $835,041, respectively)||$||837,782||$||834,410|
|Companies more than 25% owned (cost: $618,425 and $609,226, respectively)||634,135||626,760|
|Cash equivalents (cost: $139,853 and $144,826, respectively)||139,853||144,826|
|Receivable for investments sold||4,836||6,160|
|Prepaid expenses and other assets||840||1,039|
|Revolving credit facility||$||249,500||$||245,600|
|Unsecured senior notes due 2022||150,000||150,000|
|Unsecured tranche c senior notes due 2022 ($21,000 and $21,000 face amounts, respectively, reported net of unamortized debt issuance costs of $302 and $316, respectively||20,698||20,684|
|Unsecured senior notes due 2023 ($75,000 and $75,000 face amounts, respectively, reported net of unamortized debt issuance costs of $1,735 and $1,813, respectively||73,265||73,187|
|Payable for investments and cash equivalents purchased.||140,245||145,118|
|Management fee payable||6,473||7,373|
|Performance-based incentive fee payable||4,714||4,660|
|Administrative services expense payable||296||2,756|
|Other liabilities and accrued expenses||1,975||1,193|
|Common stock, par value $0.01 per share, 200,000,000 and 200,000,000 common shares authorized, respectively, and 42,260,826 and 42,260,826 shares issued and outstanding, respectively||$||423||$||423|
|Paid-in capital in excess of par||991,340||991,340|
|Distributions in excess of net investment income||(11,789||)||(13,319||)|
|Accumulated net realized loss||(73,375||)||(73,742||)|
|Net unrealized appreciation||17,727||16,903|
|Total net assets||$||924,326||$||921,605|
|Net Asset Value Per Share||$||21.87||$||21.81|
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share amounts)
|Three months ended|
|March 31, 2018
||March 31, 2017
|Companies less than 5% owned||$||24,181||$||21,818|
|Companies more than 25% owned||285||334|
|Companies less than 5% owned||6||10|
|Companies more than 25% owned||14,363||11,678|
|Companies less than 5% owned||62||492|
|Companies more than 25% owned||63||60|
|Total investment income||38,960||34,392|
|Performance-based incentive fees||4,714||4,083|
|Interest and other credit facility expenses||5,909||5,669|
|Administrative services expense||1,286||1,335|
|Other general and administrative expenses||1,721||256|
|Net investment income||$||18,857||$||16,330|
|REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS AND FOREIGN CURRENCIES:|
|Net realized gain (loss) on investments and cash equivalents:|
|Companies less than 5% owned||$||197||$||588|
|Companies 5% to 25% owned||175||(15||)|
|Companies more than 25% owned||(5||)||—|
|Net realized gain on investments and cash equivalents||367||573|
|Net realized gain (loss) on foreign currencies||—||(1||)|
|Net realized gain||367||572|
|Net change in unrealized gain (loss) on investments and cash equivalents:|
|Companies less than 5% owned||2,648||821|
|Companies 5% to 25% owned||—||(777||)|
|Companies more than 25% owned||(1,824||)||212|
|Net change in unrealized gain||824||256|
|Net realized and unrealized gain on investments, cash equivalents and foreign currencies||1,191||828|
|NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS||$||20,048||$||17,158|
|EARNINGS PER SHARE||$||0.47||$||0.41|
Solar Capital Ltd. is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. A specialty finance company with expertise in several niche markets, the Company primarily invests directly and indirectly in leveraged, U. S. middle market companies in the form of cash flow senior secured loans including first lien and second lien debt instruments and asset-based loans including senior secured loans collateralized on a first lien basis primarily by current assets.
Statements included herein may constitute “forward-looking statements,” which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, conditions 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 our filings with The Securities and Exchange Commission. Solar Capital Ltd. undertakes no duty to update any forward-looking statements made herein, unless required to do so by applicable law.
Source: Solar Capital Ltd.