Continued to execute on its strategic initiatives by considerably decreasing value of capital and decreasing non-interest incomes fairness publicity
Expects to see the total advantages of those initiatives within the second half of 2022 with improved monetary and operational efficiency
NEW YORK, Aug. 09, 2022 (GLOBE NEWSWIRE) — Logan Ridge Finance Company (“LRFC”, “Logan Ridge” or the “Firm”) (Nasdaq: LRFC) at this time introduced its monetary outcomes for the second quarter ended June 30, 2022.
Administration Commentary
Ted Goldthorpe, Chief Govt Officer and President of LRFC, mentioned, “The second quarter of 2022 was transformational for Logan Ridge and marks the first-year anniversary of our stewardship. Though we proceed to function in an unsure financial atmosphere affected by excessive inflation and rising rates of interest, our portfolio is secure and non-accruals stay low as a proportion of our complete portfolio at honest worth. Furthermore, because of the profitable execution on our marketing strategy, we’ve materially lowered our value of capital by refinancing your complete legacy debt construction at decrease charges, eradicated all near-term legal responsibility maturities and elevated our borrowing capability. Moreover, we considerably diminished the Firm’s publicity to the legacy non-interest incomes fairness investments, together with the profitable exit of its largest legacy fairness curiosity in Eastport Holding, LLC on June 29, 2022, which can enable us to reinvest the proceeds into curiosity incomes investments originated by Mount Logan Administration, which is a part of the BC Companions Credit score Platform. With the profitable completion of those substantial milestones, the present power of our portfolio and our dedication to execute on our progress initiatives, we imagine we’ve positioned Logan Ridge effectively to make the most of alternatives arising from the present credit score atmosphere, which we imagine can be a pretty classic. We at the moment are laser targeted on returning the Firm to profitability. We anticipate to see the total advantages of those initiatives beginning within the second half of 2022.”
One 12 months Anniversary Highlights
- As of June 30, 2022, 42% of the Firm’s funding portfolio at honest worth was invested in belongings originated by Mount Logan Administration, a part of the BC Companions Credit score Platform, with a further $29.5 million of money and $34.4 million of unused borrowing capability out there for deployment in investments originated by the BC Companions Credit score Platform.
- Efficiently monetized and/or realized $145.4 million of the legacy portfolio we inherited from the previous funding adviser via June 30, 2022. This represents roughly 64% of the honest worth of the portfolio we inherited.
- Credit score has stabilized and there have been no new non-accruals since Mount Logan Administration turned the Firm’s funding adviser. Additional, we efficiently exited a non-accrual funding for proceeds of $0.6 million. This place was valued at zero as of June 30, 2021.
- Obtained an funding grade credit standing.
- Refinanced your complete legacy debt construction, materially decreasing the price of capital as beforehand introduced. Consequently, the Firm has no near-term maturities.
- Strategically exited the Firm’s largest legacy non-interest incomes fairness curiosity, Eastport Holdings, LLC. This refinancing and recapitalization transaction considerably diminished the Firm’s legacy non-interest incomes fairness publicity. On account of this transaction, the Firm obtained $16.5 million in money and $19.25 million in principal of a brand new debt safety, in alternate for all of its earlier debt and fairness securities.
- As of June 30, 2022, the Firm’s non-yielding fairness portfolio represented 21.7% and 21.4% of the portfolio on a price and honest worth foundation, respectively, as in comparison with 22.9% and 32.3% of the portfolio on a price and honest worth foundation, respectively as of June 30, 2021.
- For the last-twelve-month (“LTM”) interval ended June 30, 2022, administration charges reimbursed to the administrator, BC Companions Administration LLC, totaled $0.6 million. This compares to $1.4 million reimbursed to the previous administrator, Capitala Advisors Corp, for the LTM interval ended June 30, 2021.
Chosen Second Quarter 2022 Monetary Highlights
- As of June 30, 2022, web asset worth was $101.1 million, or $37.31 per share, as in comparison with $106.2 million, or $39.16 per share, as of March 31, 2022 and $107.1 million, or $39.48 per share, as of December 31, 2021.
- Web funding loss for the second quarter was $0.9 million as in comparison with web funding lack of $1.1 million reported within the first quarter of 2022. Web funding loss for the second quarter additionally consists of sure non-recurring incremental financing prices {and professional} charges totaling $0.3 million. Excluding the impression of those non-recurring gadgets, adjusted web funding loss for the second quarter would have been $0.6 million.
- As of June 30, 2022, our portfolio consisted of investments in 44 portfolio firms with a good worth of roughly $175.9 million.
- The Firm continued to judiciously redeploy capital generated from exiting the legacy portfolio. In the course of the second quarter, the Firm made roughly $30.7 million of investments and had roughly $58.3 million in reimbursement and exits, leading to web reimbursement and gross sales of roughly $27.6 million for the interval. This compares to $16.4 million of investments and roughly $8.4 million in repayments and gross sales on the primary quarter of 2022.
- Money and money equivalents as of June 30, 2022 elevated to $29.5 million as in comparison with $15.8 million as of March 31, 2022, primarily because of the Eastport Holdings, LLC refinancing and recapitalization transaction that closed on June 29, 2022.
- As of June 30, 2022, our debt funding portfolio, which represented 75.0% of our complete portfolio at honest worth, had a weighted common annualized yield of roughly 8.7% (excluding non-accruals and collateralized mortgage obligations). This compares to a debt funding portfolio, which represented 68.1% of our complete portfolio at honest worth, with a weighted common annualized yield of roughly 8.3% (excluding non-accruals and collateralized mortgage obligations) as of March 31, 2022.
- As of June 30, 2022, we had debt investments in two portfolio firms on non-accrual standing with an mixture value of $12.1 million and honest worth of $6.4 million, which represented 6.5 % and three.6% of the funding portfolio, respectively. This compares to debt investments in two portfolio firms on non-accrual standing with an mixture value of $12.7 million and honest worth of $7.0 million, which represented 6.4 % and three.4% of the funding portfolio, respectively as of March 31, 2022.
- As of June 30, 2022, our debt-to-equity ratio was 1.0x as in comparison with 1.2x as of March 31, 2022.
- Whole funding earnings was $3.3 million for the second quarter of 2022, in comparison with $5.0 million for the second quarter of 2021. The decline was due primarily to decrease common excellent debt investments.
- Whole bills for the second quarter of 2022 declined to $4.2 million, in comparison with $5.0 million for the second quarter of 2021. The lower in bills was pushed primarily by decrease curiosity and financing charges (decreased by $0.6 million), administration charges (decreased by $0.3 million), and different basic and administrative prices (decreased by $0.2 million) as in comparison with the second quarter of 2021.
- Web funding loss for the second quarter of 2022 was $0.9 million in comparison with web funding earnings of lower than $0.1 million through the second quarter of 2021.
- Web realized achieve on investments was $15.5 million for the quarter of 2022, in comparison with $6.9 million through the second quarter of 2021.
- The Firm had a lower in web belongings ensuing from operations of $5.0 million, or $(1.86) per share, through the second quarter of 2022. This compares to a web lower in web asset from operations of $7.6 million, or $(2.79) per share, for the second quarter of 2021.
The next desk summarizes the amortized value and the honest worth of investments as of June 30, 2022:
($ in hundreds) | Investments at Amortized Price |
Amortized Price Share of Whole Portfolio |
Investments at Honest Worth |
Honest Worth Share of Whole Portfolio |
|||||||||||
First Lien Debt | $ | 104,341 | 55.7 | % | $ | 97,460 | 55.4 | % | |||||||
Second Lien Debt | 8,888 | 4.7 | % | 8,249 | 4.7 | % | |||||||||
Subordinated Debt | 26,433 | 14.1 | % | 26,250 | 14.9 | % | |||||||||
Collateralized Mortgage Obligations | 7,160 | 3.8 | % | 6,296 | 3.6 | % | |||||||||
Fairness and Warrants | 40,703 | 21.7 | % | 37,598 | 21.4 | % | |||||||||
Whole | $ | 187,525 | 100.0 | % | $ | 175,853 | 100.0 | % |
The next desk summarizes the amortized value and the honest worth of investments as of December 31, 2021:
($ in hundreds) | Investments at Amortized Price |
Amortized Price Share of Whole Portfolio |
Investments at Honest Worth |
Honest Worth Share of Whole Portfolio |
|||||||||||
First Lien Debt | $ | 103,667 | 54.4 | % | $ | 98,251 | 49.6 | % | |||||||
Second Lien Debt | 30,048 | 15.8 | % | 30,190 | 15.2 | % | |||||||||
Subordinated Debt | 5,050 | 2.6 | % | 5,050 | 2.6 | % | |||||||||
Fairness and Warrants | 51,717 | 27.2 | % | 64,698 | 32.6 | % | |||||||||
Whole | $ | 190,482 | 100.0 | % | $ | 198,189 | 100.0 | % |
Curiosity Charge Danger
Primarily based on our June 30, 2022 consolidated assertion of belongings and liabilities, the next desk reveals the annual impression on web earnings (excluding the potential associated incentive charge impression) of base price adjustments in rates of interest (contemplating rate of interest flooring for variable price securities) assuming no adjustments in our funding and borrowing construction:
Foundation Level Change ($ in hundreds) |
Improve (lower) in curiosity earnings |
(Improve) lower in curiosity expense |
Improve (lower) in web earnings |
||||||
Up 300 foundation factors | $ | 2,834 | $ | (1,235 | ) | $ | 1,599 | ||
Up 200 foundation factors | 1,881 | (823 | ) | 1,058 | |||||
Up 100 foundation factors | 928 | (412 | ) | 516 | |||||
Down 100 foundation factors | (727 | ) | 529 | (198 | ) | ||||
Down 200 foundation factors | (1,054 | ) | 529 | (525 | ) | ||||
Down 300 foundation factors | (1,056 | ) | 529 | (527 | ) |
Convention Name and Webcast
LRFC will focus on these ends in a convention name on Wednesday, August 10, 2022 at 10:00 am ET.
To entry the decision, please dial (646) 307-1963 roughly 10 minutes previous to the beginning of the convention name and use the convention ID 9702305.
A stay audio webcast of the convention name will be accessed by way of the Web, on a listen-only foundation on the Firm’s web site, loganridgefinance.com, within the Investor Relations part, underneath Occasions and Displays. The webcast can be accessed by clicking the next hyperlink: Logan Ridge Second Quarter 2022 Convention Name. The web archive of the webcast can be out there on the Firm’s web site shortly after the decision.
About Logan Ridge Finance Company
Logan Ridge Finance Company (Nasdaq: LRFC) is a enterprise improvement firm that invests primarily in first lien loans and, to a lesser extent, second lien loans and fairness securities issued by decrease center market firms. The Firm invests in performing, well-established center market companies that function throughout a variety of industries. It employs basic credit score evaluation, concentrating on investments in companies with comparatively low ranges of cyclicality and working danger. For extra data, go to loganridgefinance.com.
About Mount Logan Capital Inc.
Mount Logan Capital Inc. is another asset administration firm that’s targeted on private and non-private debt securities within the North American market. The Firm seeks to supply and actively handle loans and different debt-like securities with credit-oriented traits. The Firm actively sources, evaluates, underwrites, manages, screens and primarily invests in loans, debt securities, and different credit-oriented devices that current enticing risk-adjusted returns and current low danger of principal impairment via the credit score cycle.
About BC Companions Advisors L.P. and BC Companions Credit score
BC Companions is a number one worldwide funding agency with over $40 billion of belongings underneath administration in non-public fairness, non-public credit score and actual property methods. Established in 1986, BC Companions has performed an lively function in creating the European buyout marketplace for three many years. As we speak, BC Companions executives function throughout markets as an built-in crew via the agency’s places of work in North America and Europe. Since inception, BC Companions has accomplished 117 non-public fairness investments in firms with a complete enterprise worth of €149 billion and is at present investing its eleventh non-public fairness fund.
BC Companions Credit score was launched in February 2017 and has pursued a technique targeted on figuring out enticing credit score alternatives in any market atmosphere and throughout sectors, leveraging the deal sourcing and infrastructure made out there from BC Companions.
Cautionary Assertion Relating to Ahead-Trying Statements
This communication incorporates “forward-looking” statements. Ahead-looking statements concern future circumstances and outcomes and different statements that aren’t historic details and are generally recognized by the phrases “could,” “will,” “ought to,” “potential,” “intend,” “anticipate,” “endeavor,” “search,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “imagine,” “may,” “venture,” “predict,” “proceed,” “goal” or different related phrases or expressions. Ahead-looking statements are primarily based upon present plans, estimates and expectations which are topic to dangers, uncertainties and assumptions. Ought to a number of of those dangers or uncertainties materialize, or ought to underlying assumptions show to be incorrect, precise outcomes could fluctuate materially from these indicated or anticipated by such forward-looking statements. The inclusion of such statements shouldn’t be thought to be a illustration that such plans, estimates or expectations can be achieved. Essential components that might trigger precise outcomes to vary materially from such plans, estimates or expectations embody these danger components detailed within the Firm’s stories filed with the Securities and Change Fee (“SEC”), together with the Firm’s annual report on Kind 10-Ok, periodic quarterly stories on Kind 10-Q, present stories on Kind 8-Ok and different paperwork filed with the SEC.
Any forward-looking statements converse solely as of the date of this communication. The Firm doesn’t undertake any obligation to replace any forward-looking statements, whether or not because of new data or developments, future occasions or in any other case, besides as required by legislation. Readers are cautioned to not place undue reliance on any of those forward-looking statements.
For added data, contact:
Logan Ridge Finance Company
650 Madison Avenue, twenty third Flooring
New York, NY 10022
Jason Roos
Chief Monetary Officer
[email protected]
(212) 891-5046
The Fairness Group Inc.
Lena Cati
[email protected]
(212) 836-9611
Logan Ridge Finance Company
Consolidated Statements of Belongings and Liabilities
(in hundreds, besides share and per share information)
As of June 30, | As of December 31, | ||||||
2022 | 2021 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Investments at honest worth: | |||||||
Non-control/non-affiliate investments (amortized value of $148,331 and $151,543, respectively) | $ | 141,954 | $ | 129,991 | |||
Affiliate investments (amortized value of $30,344 and $30,089, respectively) | 30,271 | 61,359 | |||||
Management investments (amortized value of $8,850 and $8,850, respectively) | 3,628 | 6,839 | |||||
Whole investments at honest worth (amortized value of $187,525 and $190,482, respectively) | 175,853 | 198,189 | |||||
Money and money equivalents | 29,489 | 39,056 | |||||
Curiosity and dividend receivable | 1,024 | 929 | |||||
Pay as you go bills | 2,822 | 3,358 | |||||
Receivable for unsettled trades | — | 685 | |||||
Different belongings | 2,951 | — | |||||
Whole belongings | $ | 212,139 | $ | 242,217 | |||
LIABILITIES | |||||||
2022 Notes (web of deferred financing prices of zero and $46, respectively) | $ | — | $ | 22,787 | |||
2022 Convertible Notes (web of deferred financing prices of zero and $167, respectively) | — | 51,921 | |||||
2026 Notes (web of deferred financing prices and authentic challenge low cost of $1,597 and $1,552, respectively) | 48,403 | 48,448 | |||||
2032 Convertible Notes (web of deferred financing prices and authentic challenge low cost of $1,175 and 0, respectively) | 13,825 | — | |||||
KeyBank Credit score Facility (web of deferred financing prices of $1,468 and $353, respectively) | 39,128 | (353 | ) | ||||
Administration and incentive charges payable | 973 | 1,065 | |||||
Curiosity and financing charges payable | 707 | 911 | |||||
Payable for unsettled trades | 7,493 | 9,265 | |||||
Accounts payable and accrued bills | 473 | 1,144 | |||||
Whole liabilities | $ | 111,002 | $ | 135,188 | |||
Commitments and contingencies | |||||||
NET ASSETS | |||||||
Frequent inventory, par worth $0.01, 100,000,000 frequent shares approved, 2,711,068 and a pair of,711,068 frequent shares issued and excellent, respectively | $ | 27 | $ | 27 | |||
Further paid in capital | 188,846 | 188,846 | |||||
Whole distributable loss | (87,736 | ) | (81,844 | ) | |||
Whole web belongings | $ | 101,137 | $ | 107,029 | |||
Whole liabilities and web belongings | $ | 212,139 | $ | 242,217 | |||
Web asset worth per share | $ | 37.31 | $ | 39.48 |
Logan Ridge Finance Company
Consolidated Statements of Operations
(in hundreds, besides share and per share information)
(unaudited)
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
INVESTMENT INCOME | |||||||||||||||
Curiosity earnings: | |||||||||||||||
Non-control/non-affiliate investments | $ | 2,713 | $ | 2,901 | $ | 5,655 | $ | 6,098 | |||||||
Affiliate investments | 185 | 1,130 | 345 | 2,427 | |||||||||||
Management investments | 98 | 98 | 193 | 196 | |||||||||||
Whole curiosity and charge earnings | 2,996 | 4,129 | 6,193 | 8,721 | |||||||||||
Cost-in-kind curiosity and dividend earnings: | |||||||||||||||
Non-control/non-affiliate investments | 261 | 24 | 347 | 95 | |||||||||||
Affiliate investments | 46 | 99 | 93 | 198 | |||||||||||
Whole payment-in-kind curiosity and dividend earnings | 307 | 123 | 440 | 293 | |||||||||||
Dividend earnings: | |||||||||||||||
Non-control/non-affiliate investments | — | 560 | — | 560 | |||||||||||
Affiliate investments | — | — | — | 155 | |||||||||||
Whole dividend earnings | — | 560 | — | 715 | |||||||||||
Different earnings: | |||||||||||||||
Non-control/non-affiliate investments | — | 174 | 8 | 174 | |||||||||||
Affiliate investments | — | 58 | — | 67 | |||||||||||
Whole different earnings | — | 232 | 8 | 241 | |||||||||||
Whole funding earnings | 3,303 | 5,044 | 6,641 | 9,970 | |||||||||||
EXPENSES | |||||||||||||||
Curiosity and financing bills | 2,131 | 2,728 | 4,319 | 5,765 | |||||||||||
Base administration charge | 973 | 1,272 | 2,001 | 2,670 | |||||||||||
Administrators expense | 120 | 103 | 223 | 206 | |||||||||||
Administrative service charges | 131 | 350 | 251 | 700 | |||||||||||
Normal and administrative bills | 877 | 557 | 1,826 | 1,378 | |||||||||||
Whole bills | 4,232 | 5,010 | 8,620 | 10,719 | |||||||||||
NET INVESTMENT (LOSS) INCOME | (929 | ) | 34 | (1,979 | ) | (749 | ) | ||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | |||||||||||||||
Web realized achieve (loss) on investments: | |||||||||||||||
Non-control/non-affiliate investments | 15,503 | 4,732 | 15,466 | (9,291 | ) | ||||||||||
Affiliate investments | — | 2,215 | — | 2,215 | |||||||||||
Web realized achieve (loss) on investments | 15,503 | 6,947 | 15,466 | (7,076 | ) | ||||||||||
Web change in unrealized (depreciation) appreciation on investments: | |||||||||||||||
Non-control/non-affiliate investments | (16,495 | ) | (12,774 | ) | (17,645 | ) | 10,438 | ||||||||
Affiliate investments | 174 | 60 | 1,477 | 4,032 | |||||||||||
Management investments | (3,287 | ) | (1,006 | ) | (3,211 | ) | (1,030 | ) | |||||||
Web change in unrealized (depreciation) appreciation on investments | (19,608 | ) | (13,720 | ) | (19,379 | ) | 13,440 | ||||||||
Whole web realized and alter in unrealized (loss) achieve on investments | (4,105 | ) | (6,773 | ) | (3,913 | ) | 6,364 | ||||||||
Web realized loss on extinguishment of debt | — | (815 | ) | — | (815 | ) | |||||||||
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (5,034 | ) | $ | (7,554 | ) | $ | (5,892 | ) | $ | 4,800 | ||||
NET (DECREASE) INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC & DILUTED | $ | (1.86 | ) | $ | (2.79 | ) | $ | (2.17 | ) | $ | 1.77 | ||||
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC & DILUTED |
2,711,068 | 2,711,068 | 2,711,068 | 2,711,068 | |||||||||||
DISTRIBUTIONS PAID PER SHARE | $ | — | $ | — | $ | — | $ | — |