• Logan Ridge Finance Corporation Reports Second Quarter 2021 Earnings Results

    来源: Nasdaq GlobeNewswire / 16 8月 2021 06:30:01   America/Chicago

    NEW YORK, Aug. 16, 2021 (GLOBE NEWSWIRE) -- Logan Ridge Finance Corporation (“LRFC” or the “Company”) (NASDAQ: LRFC) today announced its financial results for the second quarter of 2021.

    Previously Announced Adviser Transition

    On April 21, 2021, the Company announced it had entered into an agreement to transition to a new investment adviser, Mount Logan Management LLC (“Mount Logan”), a wholly-owned subsidiary of Mount Logan Capital Inc. (“MLC”), both affiliates of BC Partners Advisors L.P. (“BC Partners”) for U.S. regulatory purposes. The transition was approved at a special meeting of the Company’s stockholders held on May 27, 2021 and was completed on July 1, 2021.

    Second Quarter 2021 Overview

    • Net asset value per share of $41.96 at June 30, 2021, compared to $44.74 at March 31, 2021.
    • Repaid $71.0 million of SBA-guaranteed debentures and relinquished the corresponding SBIC license.
    • Total debt-to-equity of 1.3x at June 30, 2021, compared to 1.6x at March 31, 2021 and 2.0x at December 31, 2020.
    • As of June 30, 2021, the Company’s investment portfolio consisted of investments in 32 portfolio companies with an aggregate fair value of approximately $228.0 million. The debt investment portfolio, which represented 67.7% of the fair value of the total portfolio, had a yield of approximately 9.9%.
    • During the quarter, the Company made approximately $10.0 million of investments and had approximately $33.5 million in repayments and sales, resulting in net repayments and sales of approximately $23.5 million for the period.
    • Subsequent to quarter-end, the Company has repaid the KeyBank credit facility in full.

    Management Commentary

    Ted Goldthorpe, Chief Executive Officer and President of LRFC, said, “We are pleased to have successfully completed the investment adviser transition to Mount Logan on July 1st. We are actively working to optimize the Company’s capital structure and to rotate out of non-income generating investments over time. Longer-term, our objective is to lower operational costs and increase scale, which we believe will enhance value for stockholders.”

    Selected Financial Highlights

    Total investment income was $5.0 million for the second quarter of 2021, compared to $4.9 million for the first quarter of 2021. Lower interest and fee income was offset primarily by non-recurring dividends received from portfolio companies during the quarter.

    Total expenses for the second quarter of 2021 were $5.0 million, compared to $5.7 million for the first quarter of 2021. Interest and financing fees decreased by $0.3 million, management fees decreased by $0.1 million and other general and administrative costs decreased by $0.3 million during the quarter.

    Net realized gains totaled $6.1 million (including a loss of $0.8 million on the extinguishment of the SBA Debentures), or $2.26 per share, for the second quarter of 2021, compared to net realized losses of $14.0 million, or $(5.17) per share, for the first quarter of 2021.

    Net change in unrealized depreciation totaled $13.7 million, or $(5.06) per share, for the second quarter of 2021, compared to net change in unrealized appreciation of $27.2 million, or $10.02 per share, for the first quarter of 2021.

    The net decrease in assets resulting from operations was $7.6 million, or $(2.79) per share, for the second quarter of 2021, compared to a net increase of $12.4 million, or $4.56 per share, for the first quarter of 2021.

    As of June 30, 2021, total borrowings outstanding were $149.9 million. This balance was comprised of $25.0 million drawn under the KeyBank credit facility, $72.8 million of 6.0% fixed-rate notes due 2022, and $52.1 million of 5.75% fixed-rate convertible notes due 2022.

    As of June 30, 2021, the Company had debt investments in three portfolio companies on non-accrual status with an aggregate amortized cost of $21.3 million and an aggregate fair value of $9.8 million, which represented 9.8% and 4.3% of the Company’s investment portfolio, respectively.

    Conference Call and Webcast

    LRFC will discuss these results in a conference call this morning (Monday, August 16, 2021) at 11:00 a.m. ET.

    To access the conference call, please dial (844) 616-4517 approximately 10 minutes prior to the start of the conference call. A replay of the conference call will be available from August 16, 2021 until August 23, 2021. The dial in number for the replay is (855) 859-2056 and the conference ID is 2190603.

    A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company’s website, loganridgefinance.com, in the Investor Relations section, under Events and Presentations. The webcast can also be accessed by clicking the following link: Logan Ridge Second Quarter 2021 Conference Call. The online archive of the webcast will be available on the Company’s website shortly after the call.

    About Logan Ridge Finance Corporation

    Logan Ridge Finance Corporation (NASDAQ: LRFC) is a business development company that invests primarily in first lien loans and, to a lesser extent, second lien loans and equity securities issued by lower middle market companies. The Company invests in performing, well-established middle market businesses that operate across a wide range of industries. It employs fundamental credit analysis, targeting investments in businesses with relatively low levels of cyclicality and operating risk. For more information, visit loganridgefinance.com.

    About Mount Logan Capital Inc.

    Mount Logan Capital Inc. is an alternative asset management company that is focused on public and private debt securities in the North American market. The Company seeks to source and actively manage loans and other debt-like securities with credit-oriented characteristics. The Company actively sources, evaluates, underwrites, manages, monitors and primarily invests in loans, debt securities, and other credit-oriented instruments that present attractive risk-adjusted returns and present low risk of principal impairment through the credit cycle.

    About BC Partners Advisors L.P. and BC Partners Credit

    BC Partners is a leading international investment firm with over $40 billion of assets under management in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades. Today, BC Partners executives operate across markets as an integrated team through the firm's offices in North America and Europe. Since inception, BC Partners has completed 117 private equity investments in companies with a total enterprise value of €149 billion and is currently investing its eleventh private equity fund.

    BC Partners Credit was launched in February 2017 and has pursued a strategy focused on identifying attractive credit opportunities in any market environment and across sectors, leveraging the deal sourcing and infrastructure made available from BC Partners.

    Cautionary Statement Regarding Forward-Looking Statements

    This communication contains “forward-looking” statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include those risk factors detailed in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including the Company’s annual report on Form 10-K, periodic quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC.

    Any forward-looking statements speak only as of the date of this communication. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

    For additional information, contact:

    Logan Ridge Finance Corporation
    650 Madison Avenue, 23rd Floor
    New York, NY 10022

    Jason Roos
    Chief Financial Officer
    Jason.Roos@bcpartners.com
    (212) 891-5046

    Jeehae Linford
    The Equity Group Inc.
    jlinford@equityny.com
    (212) 836-9615

    Logan Ridge Finance Corporation

    Consolidated Statements of Assets and Liabilities
    (in thousands, except share and per share data)

      As of 
      June 30,
    2021    		  December
    31, 2020    		 
      (unaudited)    
    ASSETS        
    Investments at fair value:        
    Non-control/non-affiliate investments (amortized cost of $143,555 and $187,744, respectively) $139,097  $172,848 
    Affiliate investments (amortized cost of $65,163 and $80,961, respectively)  81,659   93,425 
    Control investments (amortized cost of $8,850 and $8,947, respectively)  7,292   8,419 
    Total investments at fair value (amortized cost of $217,568 and $277,652, respectively)  228,048   274,692 
    Cash and cash equivalents  26,144   49,942 
    Interest and dividend receivable  1,101   2,286 
    Prepaid expenses  629   1,077 
    Receivable for unsettled trades  7,234   - 
    Total assets $263,156  $327,997 
             
    LIABILITIES        
    SBA-guaranteed debentures (net of deferred financing costs of $0 and $485, respectively) $-  $90,515 
    2022 Notes (net of deferred financing costs of $556 and $846, respectively)  72,277   71,987 
    2022 Convertible Notes (net of deferred financing costs of $362 and $552, respectively)  51,726   51,536 
    KeyBank Credit Facility (net of deferred financing costs of $450 and $546, respectively)  24,550   (546)
    Management and incentive fees payable  70   3,842 
    Interest and financing fees payable  778   1,688 
    Accounts payable and accrued expenses  8   28 
    Total liabilities $149,409  $219,050 
             
    Commitments and contingencies (Note 2)        
             
    NET ASSETS        
    Common stock, par value $0.01, 100,000,000 common shares authorized, 2,711,068 and 2,711,068 common shares issued and outstanding, respectively $27  $27 
    Additional paid in capital  229,481   229,481 
    Total distributable loss  (115,761)  (120,561)
    Total net assets $113,747  $108,947 
    Total liabilities and net assets $263,156  $327,997 
             
    Net asset value per share $41.96  $40.19 

    Logan Ridge Finance Corporation

    Consolidated Statements of Operations
    (in thousands, except share and per share data)
    (unaudited)

      For the Three Months Ended June 30,  For the Six Months Ended June 30, 
      2021  2020  2021  2020 
    INVESTMENT INCOME                
    Interest and fee income:                
    Non-control/non-affiliate investments $3,073  $4,693  $6,269  $9,400 
    Affiliate investments  1,188   1,632   2,494   3,311 
    Control investments  98   103   196   206 
    Total interest and fee income  4,359   6,428   8,959   12,917 
    Payment-in-kind interest and dividend income:                
    Non-control/non-affiliate investments  24   378   95   714 
    Affiliate investments  99   188   198   368 
    Total payment-in-kind interest and dividend income  123   566   293   1,082 
    Dividend income:                
    Non-control/non-affiliate investments  560   -   560   - 
    Affiliate investments  -   -   155   25 
    Total dividend income  560   -   715   25 
    Interest income from cash and cash equivalents  2   5   3   49 
    Total investment income  5,044   6,999   9,970   14,073 
                     
    EXPENSES                
    Interest and financing expenses  2,728   4,885   5,765   8,711 
    Base management fee  1,272   1,666   2,670   3,423 
    Administrative service fees  350   350   700   700 
    General and administrative expenses  660   707   1,584   1,861 
    Total expenses  5,010   7,608   10,719   14,695 
                     
    NET INVESTMENT INCOME (LOSS)  34   (609)  (749)  (622)
                     
    REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS                
    Net realized gain (loss) on investments:                
    Non-control/non-affiliate investments  4,732   (14,142)  (9,291)  (13,174)
    Affiliate investments  2,215   1,341   2,215   1,341 
    Control investments  -   (484)  -   (484)
    Net realized gain (loss) on investments  6,947   (13,285)  (7,076)  (12,317)
    Net unrealized (depreciation) appreciation investments:                
    Non-control/non-affiliate investments  (12,774)  16,993   10,438   (11,532)
    Affiliate investments  60   (1,003)  4,032   (14,731)
    Control investments  (1,006)  1,004   (1,030)  (138)
    Net unrealized (depreciation) appreciation on investments  (13,720)  16,994   13,440   (26,401)
    Total net realized and unrealized (loss) gain on investments  (6,773)  3,709   6,364   (38,718)
    Net realized loss on extinguishment of debt  (815)  -   (815)  - 
                     
    NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(7,554) $3,100  $4,800  $(39,340)
                     
    NET (DECREASE) INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC AND DILUTED(1) $(2.79) $1.14  $1.77  $(14.53)
                     
    WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC AND DILUTED (1)  2,711,068   2,711,081   2,711,068   2,707,256 
                     
    DISTRIBUTIONS PAID PER SHARE (2) $-  $-  $-  $1.50 


    (1) Basic and diluted shares of the Company’s common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1.
    (2) Dividends paid per share of the Company's common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1 to the Company’s Consolidated Financial Statements (unaudited), included in the Company’s quarterly report on Form 10-Q for the period ended June 30, 2021.


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