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PennantPark Investment Corporation Announces Financial Results for the Quarter Ended March 31, 2016

NEW YORK, NY, May 04, 2016 (Marketwired via COMTEX) -- NEW YORK, NY--(Marketwired - May 4, 2016) - PennantPark Investment Corporation PNNT, -1.70% announced today financial results for the second fiscal quarter ended March 31, 2016.

                                                                             
HIGHLIGHTS                                                                        
Quarter ended March 31, 2016                                                      
($in millions, except per share amounts)                                          
                                                                        
Assets and Liabilities:                                                      
                Investment portfolio                              $      1,231.5  
                Net assets                                        $      627.6    
                Net asset value per share                         $      8.83     
                                                                   
                Credit Facility                                   $      128.8    
                2019 Notes                                        $      247.2    
                SBA debentures                                    $      168.5    
                2025 Notes                                        $      67.1     
                                                                        
Yield on debt investments at quarter-end                                 11.9    %
                                                                        
Operating Results:                                                           
                Net investment income                             $      20.8     
                Net investment income per share                   $      0.29     
                Distributions declared per share                  $      0.28     
                                                                        
Portfolio Activity:                                                          
                Purchases of investments                          $      86.5     
                Sales and repayments of investments               $      92.9     
                                                                        
                Number of new portfolio companies invested          2        
                Number of existing portfolio companies invested     4        
                Number of portfolio companies at quarter-end        61       
                                                                        

CONFERENCE CALL AT 10:00 A.M. ET ON MAY 5, 2016

PennantPark Investment Corporation ("we," "our," "us" or "Company") will host a conference call at 10:00 a.m. (Eastern Time) on Thursday, May 5, 2016 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing (888) 811-5456 approximately 5-10 minutes prior to the call. International callers should dial (913) 312-0648. All callers should reference PennantPark Investment Corporation. An archived replay of the call will be available through May 19, 2016 by calling (888) 203-1112. International callers please dial (719) 457-0820. For all phone replays, please reference conference ID #6473004.

FEE WAIVER

For the three and six months ended March 31, 2016 and through December 31, 2016, PennantPark Investment Adviser LLC has voluntarily agreed, in consultation with the board of directors, to waive 16% of both base and incentive fee, or collectively referred to as Management Fee, correlated to our 16% energy exposure (oil & gas and energy & utilities industries) at cost as of December 31, 2015. For the three and six months ended March 31, 2016, the fee waiver was $1.7 million and $3.4 million, or $0.02 and $0.05 per share, respectively. For each the three and six months ended March 31, 2015, there was no fee waiver.

PORTFOLIO AND INVESTMENT ACTIVITY

As of March 31, 2016, our portfolio totaled $1,231.5 million and consisted of $454.7 million of senior secured debt, $486.1 million of second lien secured debt, $171.2 million of subordinated debt and $119.5 million of preferred and common equity. Our debt portfolio consisted of 76% variable-rate investments (including 72% with a London Interbank Offered Rate, or LIBOR, or prime floor) and 24% fixed-rate investments. As of March 31, 2016, we had four companies on non-accrual, representing 7.2% and 2.3% of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $181.1 million as of March 31, 2016. Our overall portfolio consisted of 61 companies with an average investment size of $20.2 million, had a weighted average yield on interest bearing debt investments of 11.9% and was invested 37% in senior secured debt, 39% in second lien secured debt, 14% in subordinated debt and 10% in preferred and common equity.

As of September 30, 2015, our portfolio totaled $1,299.0 million and consisted of $399.2 million of senior secured debt, $612.5 million of second lien secured debt, $182.5 million of subordinated debt and $104.8 million of preferred and common equity. Our debt portfolio consisted of 71% variable-rate investments (including 65% with a LIBOR or prime floor) and 29% fixed-rate investments. As of September 30, 2015, we had four companies on non-accrual, representing 9.4% and 5.5% of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $125.2 million as of September 30, 2015. Our overall portfolio consisted of 61 companies with an average investment size of $21.3 million, had a weighted average yield on interest bearing debt investments of 12.1% and was invested 31% in senior secured debt, 47% in second lien secured debt, 14% in subordinated debt and 8% in preferred and common equity.

For the three months ended March 31, 2016, we invested $86.5 million in two new and four existing portfolio companies with a weighted average yield on debt investments of 10.8%. Sales and repayments of investments for the three months ended March 31, 2016 totaled $92.9 million. For the six months ended March 31, 2016, we invested $216.8 million in six new and 10 existing portfolio companies with a weighted average yield on debt investments of 11.7%. Sales and repayments of investments for the six months ended March 31, 2016 totaled $201.0 million.

For the three months ended March 31, 2015, we invested $72.6 million in two new and eight existing portfolio companies with a weighted average yield on debt investments of 12.9%. Sales and repayments of investments for the three months ended March 31, 2015 totaled $103.2 million. For the six months ended March 31, 2015, we invested $231.5 million in five new and 13 existing portfolio companies with a weighted average yield on debt investments of 12.7%. Sales and repayments of investments for the six months ended March 31, 2015 totaled $182.5 million.

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three and six months ended March 31, 2016 and 2015.

Investment Income

Investment income for the three and six months ended March 31, 2016 was $39.1 million and $74.4 million, respectively, and was attributable to $19.6 million and $32.5 million from senior secured loans, $13.8 million and $31.2 million from second lien secured debt, $5.7 million and $10.7 million from subordinated debt, preferred and common equity, respectively. This compares to investment income for the three and six months ended March 31, 2015, which was $42.7 million and $81.9 million, respectively, and was attributable to $15.7 million and $30.3 million from senior secured loans, $18.8 million and $34.6 million from second lien secured debt, $8.0 million and $16.3 million from subordinated debt, and $0.2 million and $0.7 million from preferred and common equity, respectively. The decrease in investment income compared with the same periods in the prior year was primarily due to a lower yielding portfolio.

Expenses

Net expenses for the three and six months ended March 31, 2016 totaled $18.3 million and $36.7 million, respectively. Base management fee for the same periods totaled $5.1 million (after a base management fee waiver of $1.0 million) and $10.6 million (after a base management fee waiver of $2.0 million), incentive fee totaled $4.0 million (after an incentive fee waiver of $0.7 million) and $7.2 million (after an incentive fee waiver of $1.4 million), debt related interest and expenses totaled $6.9 million and $13.7 million, general and administrative expenses totaled $1.9 million and $3.5 million and provision for taxes totaled $0.4 million and $1.7 million, respectively. This compares to expenses for the three and six months ended March 31, 2015, which totaled $20.6 million and $40.3 million, respectively. Base management fee for the same periods totaled $6.8 million and $13.6 million, incentive fee totaled $5.5 million and $10.4 million, debt related interest and expenses totaled $6.6 million and $13.1 million and general and administrative expenses totaled $1.7 million and $3.2 million, respectively. The decrease in expenses compared with the same periods in the prior year was primarily due to the Management Fee waiver and lower portfolio size offset by a higher provision for taxes.

Net Investment Income

Net investment income totaled $20.8 million and $37.7 million, or $0.29 and $0.52 per share, for the three and six months ended March 31, 2016, respectively. Net investment income totaled $22.1 million and $41.6 million, or $0.29 and $0.55 per share, for the three and six months ended March 31, 2015, respectively. The decrease in net investment income per share compared to the same periods in the prior year was primarily due to the repayments of higher yielding investments.

Net Realized Gains or Losses

Sales and repayments of investments for the three and six months ended March 31, 2016 totaled $92.9 million and $201.0 million, respectively, and realized losses totaled $11.2 million and $36.6 million, respectively. Sales and repayments of investments for the three and six months ended March 31, 2015 totaled $103.2 million and $182.5 million, respectively, and realized gains totaled $9.5 million and $18.1 million, respectively. The increase in realized losses compared with the same periods in the prior year was primarily due to the changes in market conditions of our investments and a higher volume of sales and...


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