SLR Investment Corp. Announces Quarter Ended June 30, 2021 Financial Results
Stable Net Asset Value
Robust Q3 Pipeline Should Drive Meaningful Portfolio Growth
Declares Quarterly Distribution of
The Board declared a third quarter distribution of $0.41 per share payable on October 5, 2021 to stockholders of record as of September 23, 2021. The specific tax characteristics will be reported to stockholders on Form 1099 after the end of the calendar year.
Number of portfolio companies: >600*
Net asset value per share:
Net debt-to-equity: 0.73x
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 for the quarter ended
** Please see Liquidity and Capital Resources.
*** Comprehensive Portfolio Activity for the quarter ended
“SLRC’s portfolio continued to perform well during the second quarter, driven by our conservative underwriting and focus on investing in upper middle-market companies and our specialty finance strategies,” said
“Our third quarter activity is strong and the pipeline is robust. We expect investments across our strategies to result in meaningful portfolio growth during Q3,” said
Conference Call and Webcast
The Company will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Wednesday, August 4, 2021. 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 SLR Investment Corp. and the participant passcode of 2376837 when prompted. A telephone replay will be available until August 18, 2021 and can be accessed by dialing (855) 859-2056 and using the passcode 2376837. 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 SLR Investment’s website, www.slrinvestmentcorp.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.
Comprehensive Investment Portfolio
During the three months ended
The investment activity of our Comprehensive Investment Portfolio for the quarter ended
|Comprehensive Investment Portfolio Activity (1) – Q2 2021
|Asset Class||Cash Flow
Loans / SLR-CS(2)
Financings / SLR-EF(3)
(1) Total Portfolio Activity includes gross originations/repayments across each business unit.
(2) Includes SLR-CS’ full portfolio and asset-based loans on the Company’s balance sheet.
(3) Includes SLR-EF’s full portfolio and equipment financings on the Company’s balance sheet.
(4) Gross origination and repayment activity for KBH’s portfolio.
Our Comprehensive Investment Portfolio composition by business unit at
|Comprehensive Investment Portfolio Composition
(at fair value)
|Cash Flow Senior Secured Loans||17.6%||8.4%|
|Asset-Based Senior Secured Loans / SLR-CS1)||20.3%||10.3%|
|Equipment Senior Secured Financings / SLR-EF(2)||16.4%||9.9%|
|Life Science Senior Secured Loans||14.1%||9.7%(6)|
|Total Senior Secured Loans||99.3%||9.8%|
|Total Comprehensive Investment Portfolio||100%|
|Floating Rate Investments(4)||52.5%|
|First Lien Senior Secured Loans||95.0%|
|Second Lien Senior Secured Cash Flow Loans||2.4%|
|Second Lien Senior Secured Asset-Based Loans||1.9%|
(1) Includes SLR-CS’ full portfolio and asset-based and lender finance loans on the Company’s balance sheet and excludes the Company’s equity investment in SLR-CS.
(2) Includes SLR-EF’s full portfolio and equipment financings on the Company’s balance sheet and excludes the Company’s equity investments in SLR-EF.
(3) Includes KBH’s full portfolio and excludes the Company’s equity and debt investments in KBH.
(4) 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 SLR-EF and leases associated with KBH. Additionally, SLR-EF and KBH seek to match-fund their fixed rate assets with fixed rate liabilities.
(5) The weighted average asset yield for cash flow, asset-based and life science loans on balance sheet is based on a yield to maturity calculation. The weighted average yield for equipment financing and SLR-CS asset-based loans is calculated based on the expected average life of a loan for each asset class.
(6) Life Science yields exclude the impact of success fees and/or warrants.
(7) Represents the annualized Q2 2021 dividend yield at cost on SLRC’s equity investment in KBH.
The Comprehensive Investment Portfolio is diversified across over 600 unique borrowers in over 75 industries and with an average exposure of
The weighted average yield at fair value of all income-producing investments in the Comprehensive Portfolio was 9.8% at
The Company puts its greatest emphasis on risk mitigation 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 ($mm)||% of Total Portfolio|
Investment Income Contribution by Business Unit
|Business Unit Contribution to Gross Investment Income (1)
|For the Quarter
Financing / SLR-EF
(1) Investment Income Contribution by Business Unit includes interest income/fees from cash flow loans on balance sheet, income/fees from asset-based loans on balance sheet and distributions from SLR-CS, income/fees from equipment financings and distributions from SLR-EF, distributions from KBH, and income/fees from life science loans.
SLR Investment Corp.’s Results of Operations for the Quarter Ended
For the fiscal quarters ended
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 quarters ended
Liquidity and Capital Resources
Financial Statements and Tables
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share amounts)
|Investments at fair value:|
|Companies less than 5% owned (cost:
|Companies more than 25% owned (cost:
|Cash equivalents (cost:
|Receivable for investments sold||161||255|
|Prepaid expenses and other assets||699||571|
|Payable for investments and cash equivalents purchased||425,267||380,038|
|Management fee payable||6,890||6,535|
|Performance-based incentive fee payable||3,880||792|
|Administrative services payable||981||1,946|
|Other liabilities and accrued expenses||2,485||2,430|
|Commitments and contingencies|
|Common stock, par value
|Paid-in capital in excess of par||962,481||962,481|
|Accumulated distributable net loss||(105,458)||(110,881)|
|Total net assets||$||857,446||$||852,023|
|Net Asset Value Per Share||$||20.29||$||20.16|
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except share amounts)
|Three months ended|
|Companies less than 5% owned||$||22,483||$||20,573|
|Companies more than 25% owned||2,886||1,339|
|Companies less than 5% owned||—||10|
|Companies more than 25% owned||9,832||6,215|
|Companies less than 5% owned||356||485|
|Companies more than 25% owned||15||3|
|Total investment income||35,572||28,625|
|Performance-based incentive fees||3,879||—|
|Interest and other credit facility expenses||7,146||6,623|
|Administrative services expense||1,375||1,148|
|Other general and administrative expenses||763||682|
|Net investment income||$||15,519||$||14,201|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS, DEBT AND UNFUNDED COMMITMENTS:
|Net realized gain (loss) on investments and cash equivalents (companies less than 5% owned)||$||561||$||(24,794)|
|Net change in unrealized gain (loss) on investments, cash equivalents and unfunded commitments and net change in unrealized (gain) loss on debt:|
|Companies less than 5% owned||1,745||47,491|
|Companies more than 25% owned||742||25,787|
|Net change in unrealized gain on investments, cash equivalents, debt and unfunded commitments||2,487||64,639|
|Net realized and unrealized gain on investments, cash equivalents, debt and unfunded commitments||3,048||39,845|
|NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS||$||18,567||$||54,046|
|EARNINGS PER SHARE||$||0.44||$||1.28|
SLR Investment Corp. 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 our future performance, financial 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 market volatility on our business, our portfolio companies and the global economy. 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
Source: SLR Investment Corp.