SLR Investment Corp. Announces Quarter Ended September 30, 2024 Financial Results
11/06/24
Net Investment Income of
Declared Quarterly Distribution of
Stable NAV and NII per Share
As of
“Third quarter NII per share reflected another quarter of stability and ample dividend coverage. SLRC’s specialty finance loans continue to be a source of unique and differentiated investments, which was visible in an active quarter of originations in SLRC’s asset-based lending strategy, including the acquisition of a factoring business, and contributed to another quarter of growth in the comprehensive investment portfolio,” said
“The consistency of NAV per share in 2024 is a testament to SLR’s multi-strategy approach to private credit investing, providing resiliency across economic and interest rate cycles from asset classes with significant downside protection,” said
FINANCIAL HIGHLIGHTS FOR QUARTER ENDED
Investment portfolio fair value:
Net assets:
Leverage: 1.10x net debt-to-equity
Net investment income:
Net realized and unrealized losses:
Net increase in net assets from operations:
COMPREHENSIVE INVESTMENT PORTFOLIO(1) HIGHLIGHTS AND ACTIVITY(2) FOR QUARTER ENDED
Portfolio fair value:
Number of Unique issuers: approximately 850
Investments made during the quarter:
Investments prepaid and sold during the quarter:
(1) The Comprehensive Investment Portfolio for the quarter ended
(2) Comprehensive Investment Portfolio activity for the quarter ended
Comprehensive Investment Portfolio
Portfolio Activity
During the three months ended
| Asset Class | Sponsor Finance(1) |
Asset-based Lending(2) |
Equipment Finance(3) |
Life Science Finance |
Total Portfolio Activity |
|||||
| Originations | ||||||||||
| Repayments / Amortization |
||||||||||
| Net Portfolio Activity |
($24.3) | $136.2 | $33.2 | ($76.9) | $ 68.2 | |||||
(1) Sponsor Finance refers to cash flow loans to sponsor-owned companies including cash flow loans held in SSLP attributable to the Company.
(2) Includes SLR-CS, SLR-BC and SLR-HC ABL’s portfolios, as well as asset-based loans on the Company’s balance sheet.
(3) Includes SLR-EF’s portfolio and equipment financings on the Company’s balance sheet and Kingsbridge Holdings’ (KBH) portfolio.
Comprehensive Investment Portfolio Composition
The Comprehensive Investment Portfolio is diversified across approximately 850 unique issuers, operating in over 109 industries, and resulting in an average exposure of
SLRC’s Comprehensive Investment Portfolio composition by asset class as of
| Comprehensive Investment Portfolio Composition (at fair value) |
Amount | Weighted Average Asset Yield(5) |
||||
| ($mm) | % | |||||
| Senior Secured Investments Cash Flow Loans (Sponsor Finance)(1) |
22.4% | 11.1% | ||||
| Asset-Based Loans(2) | 35.0% | 14.4% | ||||
| Equipment Financings(3) | 33.4% | 9.4% | ||||
| Life Science Loans | 7.5% | 12.6% | ||||
| Total Senior Secured Investments | $3,137.2 | 98.3% | 11.8% | |||
| 1.7% | ||||||
| Total Comprehensive Investment Portfolio | $3,192.5 | 100.0% | ||||
| Floating Rate Investments(4) | 65.4% | |||||
| First Lien Senior Secured Loans | 96.8% | |||||
| Second Lien Senior Secured Asset-Based Loans |
1.2% | |||||
| Second Lien Senior Secured Cash Flow Loans |
0.2% | |||||
(1) Includes cash flow loans held in the SSLP attributable to the Company and excludes the Company’s equity investment in SSLP.
(2) Includes SLR-CS, SLR-BC, and SLR-HC ABL’s portfolios, as well as asset-based loans on the Company’s balance sheet, and excludes the Company’s equity investments in each of SLR-CS, SLR-BC, and SLR-HC ABL.
(3) Includes SLR-EF’s portfolio and equipment financings on the Company’s balance sheet and Kingsbridge Holdings’ (KBH) portfolio. Excludes the Company’s equity and debt investments in each of SLR-EF and KBH.
(4) Floating rate investments are 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 held by 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 income producing cash flow, asset-based and life science loans on balance sheet is based on a yield to maturity calculation. The weighted average asset yield calculation for Life Science loans includes the amortization of expected exit/success fees. The weighted average yield for on-balance sheet equipment financings is calculated based on the expected average life of the investments. The weighted average asset yield for SLR-CS asset-based loans is an Internal Rate of Return (IRR) calculated using actual cash flows received and the expected terminal value. The weighted average asset yield for SLR-BC and SLR-HC ABL represents total interest and fee income for the three-month period ended on
Asset Quality
As of
The Company emphasizes 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.
As of
| Internal Investment Rating | Investments at Fair Value ($mm) | % of Total Portfolio | |
| 1 | 29.2% | ||
| 2 | 69.5% | ||
| 3 | 0.9% | ||
| 4 | 0.4% | ||
Investment Income Contribution by Asset Class
| Investment Income Contribution by Asset Class(1) ($mm) |
|||||
| For the Quarter Ended: |
Sponsor Finance |
Asset-based Lending |
Equipment Finance |
Life Science Finance |
Total |
| $59.8 | |||||
| % Contribution | 35.8% | 25.7% | 13.1% | 25.4% | 100.0% |
(1) Investment Income Contribution by Asset Class includes: interest income/fees from Sponsor Finance (cash flow) loans on balance sheet and distributions from SSLP; income/fees from asset-based loans on balance sheet and distributions from SLR-CS, SLR-BC, SLR-HC ABL; income/fees from equipment financings and distributions from SLR-EF and distributions from KBH; and income/fees from life science loans on balance sheet.
As of
In Q3 2024, the Company earned income of
SLR Investment Corp.’s Results of Operations for the Quarter Ended
Investment Income
SLRC’s gross investment income totaled
Expenses
SLRC’s net expenses totaled
SLRC’s investment adviser agreed to waive incentive fees resulting from income earned due to the accretion of the purchase price discount allocated to investments acquired in the Company’s merger with
Net Investment Income
SLRC’s net investment income totaled
Net Realized and Unrealized Gain (Loss)
Net realized and unrealized gains / (losses) for the fiscal quarters ended
Net Increase in Net Assets Resulting from Operations
For the three months ended
Capital and Liquidity
Credit Facilities
As of
Unsecured Debt
As of
Leverage
As of
As of
Unfunded Commitments
As of
Subsequent Events
Distributions
On
Conference Call and Webcast Information
The Company will host an earnings conference call and audio webcast at
Financial Statements and Tables
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share amounts)
| September 30, 2024 |
December 31, 2023 |
||
| Assets | |||
| Investments at fair value: | |||
| Companies less than 5% owned (cost: |
|||
| Companies 5% to 25% owned (cost: |
90,259 | 44,250 | |
| Companies more than 25% owned (cost: |
874,528 | 839,074 | |
| Cash | 22,959 | 11,864 | |
| Cash equivalents (cost: |
322,674 | 332,290 | |
| Dividends receivable | 12,151 | 11,768 | |
| Interest receivable | 10,459 | 11,034 | |
| Receivable for investments sold | 1,870 | 1,538 | |
| Prepaid expenses and other assets | 771 | 608 | |
| Total assets | $2,442,912 | $2,523,868 | |
| Liabilities | |||
| Debt ( |
|||
| Payable for investments and cash equivalents purchased | 322,694 | 332,290 | |
| Management fee payable | 7,893 | 8,027 | |
| Performance-based incentive fee payable | 6,036 | 5,864 | |
| Interest payable | 6,303 | 7,535 | |
| Administrative services payable | 2,502 | 1,969 | |
| Other liabilities and accrued expenses… | 2,845 | 3,767 | |
| Total liabilities… | $1,450,227 | $1,537,229 | |
| Net Assets | |||
| Common stock, par value |
|||
| Paid-in capital in excess of par | 1,117,930 | 1,117,930 | |
| Accumulated distributable net loss | (125,791) | (131,837) | |
| Total net assets | $992,685 | $986,639 | |
| Net Asset Value Per Share | $18.20 | $18.09 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share amounts)
| Three months ended | ||||||
2024 |
2023 |
|||||
| INVESTMENT INCOME: | ||||||
| Interest: | ||||||
| Companies less than 5% owned | ||||||
| Companies 5% to 25% owned | 926 | 816 | ||||
| Companies more than 25% owned | 3,379 | 2,879 | ||||
| Dividends: | ||||||
| Companies 5% to 25% owned | 91 | -- | ||||
| Companies more than 25% owned | 12,487 | 11,429 | ||||
| Other income: | ||||||
| Companies less than 5% owned | 1,688 | 735 | ||||
| Companies more than 25% owned . | 132 | 86 | ||||
| Total investment income | ||||||
| EXPENSES: | ||||||
| Management fees | ||||||
| Performance-based incentive fees | 6,077 | 5,796 | ||||
| Interest and other credit facility expenses | 18,913 | 19,874 | ||||
| Administrative services expense | 1,392 | 1,575 | ||||
| Other general and administrative expenses | 1,189 | 1,161 | ||||
| Total expenses | 35,464 | 36,457 | ||||
| Performance-based incentive fees waived | (41) | (175) | ||||
| Net expenses | 35,423 | 36,282 | ||||
| Net investment income | ||||||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND CASH EQUIVALENTS: | ||||||
| Net realized loss on investments and cash equivalents (companies less than 5% owned) | (2,748) | (30,951) | ||||
| Net change in unrealized gain (loss) on investments and cash equivalents: | ||||||
| Companies less than 5% owned | (4,027) | 33,439 | ||||
| Companies 5% to 25% owned | 3,411 | 1,065 | ||||
| Companies more than 25% owned | 1,065 | 35 | ||||
| Net change in unrealized gain (loss) on investments and cash equivalents |
||||||
| 449 | 34,539 | |||||
| Net realized and unrealized gain (loss) on investments and cash equivalents |
||||||
| (2,299) | 3,588 | |||||
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
||||||
| $22,049 | $26,947 | |||||
| EARNINGS PER SHARE | $0.40 | $0.49 | ||||
About
Forward-Looking Statements
Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition. The forward-looking statements may include statements as to: the expected stability of the Company’s earnings and distributions to shareholders; the Company’s access to deal flow and attractive investment opportunities; the Company’s ability to opportunistically access the investment grade debt market; the market environment and its impact on the business prospects of SLRC and the prospects of SLRC’s portfolio companies; prospects for additional portfolio growth of SLRC; and the quality of, and the impact on the performance of SLRC from the investments that SLRC has made and expects to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with: (i) changes in the economy, financial markets and political environment, including the impacts of inflation and changing interest rates; (ii) risks associated with possible disruption in the operations of SLRC or the economy generally due to terrorism, war or other geopolitical conflicts, natural disasters, or pandemics; (iii) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); (iv) conditions in SLRC’s operating areas, particularly with respect to business development companies or regulated investment companies; and (v) other considerations that may be disclosed from time to time in SLRC’s publicly disseminated documents and filings. SLRC has based the forward-looking statements included in this press release on information available to it on the date of this press release, and SLRC assumes no obligation to update any such forward-looking statements. Although SLRC undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that it may make directly to you or through reports that SLRC in the future may file with the
Contact
Investor Relations
slrinvestorrelations@slrcp.com | (646) 308-8770
Source: SLR Investment Corp.