Monroe Capital Corporation BDC Announces Third Quarter 2022 Results
Except where the context suggests otherwise, the terms “Monroe,” “we,” “us,” “our,” and “Company” refer to
Third Quarter 2022 Financial Highlights
- Net Investment Income of
$6.3 million , or$0.29 per share - Adjusted Net Investment Income (a non-GAAP measure described below) of
$7.1 million , or$0.33 per share - Net decrease in net assets resulting from operations of
$0.7 million , or$0.03 per share - Net Asset Value (“NAV”) of
$226.0 million , or$10.43 per share - Paid quarterly dividend of
$0.25 per share onSeptember 30, 2022
Chief Executive Officer
| (1) | Based on an annualized dividend and closing share price as of |
|
Management Commentary
We are pleased to report Adjusted Net Investment Income totaled
NAV decreased by
During the quarter, MRCC’s debt-to-equity leverage decreased from 1.38 times debt-to-equity to 1.33 times debt-to equity. We have a strong new investment pipeline, and we continue to focus on selectively redeploying capital stemming from repayments to modestly increase MRCC’s leverage level while continuing to actively manage our investment portfolio.
| Selected Financial Highlights | ||||||||
| (in thousands, except per share data) | ||||||||
| (unaudited) | ||||||||
| Consolidated Statements of Assets and Liabilities data: | ||||||||
| Investments, at fair value | $ | 508,018 | $ | 536,039 | ||||
| Total assets | $ | 532,556 | $ | 556,331 | ||||
| Total net assets | $ | 225,956 | $ | 232,121 | ||||
| Net asset value per share | $ | 10.43 | $ | 10.71 | ||||
| For the quarter ended | ||||||||
| (unaudited) | ||||||||
| Consolidated Statements of Operations data: | ||||||||
| Net investment income | $ | 6,260 | $ | 5,014 | ||||
| Adjusted net investment income(2) | 7,128 | $ | 5,416 | |||||
| Net gain (loss) | $ | (7,009 | ) | $ | (12,378 | ) | ||
| Net increase (decrease) in net assets resulting from operations | $ | (749 | ) | $ | (7,364 | ) | ||
| Per share data: | ||||||||
| Net investment income | $ | 0.29 | $ | 0.23 | ||||
| Adjusted net investment income(2) | $ | 0.33 | $ | 0.25 | ||||
| Net gain (loss) | $ | (0.32 | ) | $ | (0.57 | ) | ||
| Net increase (decrease) in net assets resulting from operations | $ | (0.03 | ) | $ | (0.34 | ) | ||
| (2) | See Non-GAAP Financial Measure – Adjusted Net Investment Income below for a detailed description of this non-GAAP measure and a reconciliation from net investment income to Adjusted Net Investment Income. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. | ||
Portfolio Review
The Company had debt and equity investments in 98 portfolio companies, with a total fair value of
Financial Review
Net Investment Income for the quarter ended
Net gain (loss) was
Net increase (decrease) in net assets resulting from operations was
Liquidity and Capital Resources
At
SLF is a joint venture with
As of
Non-GAAP Financial Measure – Adjusted Net Investment Income
On a supplemental basis, the Company discloses Adjusted Net Investment Income (including on a per share basis) which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with generally accepted accounting principles of
The following table provides a reconciliation from net investment income (the most comparable GAAP measure) to Adjusted Net Investment Income for the periods presented:
| For the quarter ended | ||||||||||||||||
| Amount | Per Share Amount |
Amount | Per Share Amount |
|||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Net investment income | $ | 6,260 | $ | 0.29 | $ | 5,014 | $ | 0.23 | ||||||||
| Net capital gains incentive fee | — | — | — | — | ||||||||||||
| Income taxes, including excise taxes | 868 | 0.04 | 402 | 0.02 | ||||||||||||
| Adjusted Net Investment Income | $ | 7,128 | $ | 0.33 | $ | 5,416 | $ | 0.25 | ||||||||
Adjusted Net Investment Income may not be comparable to similar measures presented by other companies, as it is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, Adjusted Net Investment Income should be considered in addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP.
Third Quarter 2022 Financial Results Conference Call
The Company will host a webcast and conference call to discuss these operating and financial results on
For those unable to listen to the live broadcast, the webcast will be available for replay on the Company’s website approximately two hours after the event.
For a more detailed discussion of the financial and other information included in this press release, please also refer to the Company’s Form 10-Q for the quarter ended
| CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | ||||||||
| (in thousands, except per share data) | ||||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Investments, at fair value: | ||||||||
| Non-controlled/non-affiliate company investments | $ | 386,200 | $ | 407,457 | ||||
| Non-controlled affiliate company investments | 85,274 | 91,031 | ||||||
| Controlled affiliate company investments | 36,544 | 37,551 | ||||||
| Total investments, at fair value (amortized cost of: |
508,018 | 536,039 | ||||||
| Cash | 7,129 | 5,969 | ||||||
| Unrealized gain on foreign currency forward contracts | 2,284 | 1,421 | ||||||
| Interest receivable | 14,680 | 12,302 | ||||||
| Other assets | 445 | 600 | ||||||
| Total assets | 532,556 | 556,331 | ||||||
| LIABILITIES | ||||||||
| Debt: | ||||||||
| Revolving credit facility | 171,200 | 190,000 | ||||||
| 2026 Notes | 130,000 | 130,000 | ||||||
| Total debt | 301,200 | 320,000 | ||||||
| Less: Unamortized deferred financing costs | (3,223 | ) | (3,743 | ) | ||||
| Total debt, less unamortized deferred financing costs | 297,977 | 316,257 | ||||||
| Interest payable | 1,305 | 2,759 | ||||||
| Management fees payable | 2,222 | 2,269 | ||||||
| Incentive fees payable | 1,565 | 657 | ||||||
| Accounts payable and accrued expenses | 3,496 | 2,268 | ||||||
| Directors' fees payable | 35 | — | ||||||
| Total liabilities | 306,600 | 324,210 | ||||||
| Net assets | $ | 225,956 | $ | 232,121 | ||||
| ANALYSIS OF NET ASSETS | ||||||||
| Common stock, |
$ | 22 | $ | 22 | ||||
| Capital in excess of par value | 298,687 | 298,687 | ||||||
| Accumulated undistributed (overdistributed) earnings | (72,753 | ) | (66,588 | ) | ||||
| Total net assets | $ | 225,956 | $ | 232,121 | ||||
| Net asset value per share | $ | 10.43 | $ | 10.71 | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (in thousands, except per share data) | ||||||||
| For the quarter ended | ||||||||
| (unaudited) | ||||||||
| Investment income: | ||||||||
| Non-controlled/non-affiliate company investments: | ||||||||
| Interest income | $ | 9,383 | $ | 7,992 | ||||
| Payment-in-kind interest income | 738 | 644 | ||||||
| Dividend income | 103 | 100 | ||||||
| Fee income | 412 | 1,192 | ||||||
| Total investment income from non-controlled/non-affiliate company investments | 10,636 | 9,928 | ||||||
| Non-controlled affiliate company investments: | ||||||||
| Interest income | 3,830 | 1,366 | ||||||
| Payment-in-kind interest income | 502 | 753 | ||||||
| Dividend income | 48 | 48 | ||||||
| Total investment income from non-controlled affiliate company investments | 4,380 | 2,167 | ||||||
| Controlled affiliate company investments: | ||||||||
| Dividend income | 900 | 900 | ||||||
| Total investment income from controlled affiliate company investments | 900 | 900 | ||||||
| Total investment income | 15,916 | 12,995 | ||||||
| Operating expenses: | ||||||||
| Interest and other debt financing expenses | 4,263 | 3,776 | ||||||
| Base management fees | 2,222 | 2,269 | ||||||
| Incentive fees | 1,565 | 774 | ||||||
| Professional fees | 212 | 248 | ||||||
| Administrative service fees | 275 | 303 | ||||||
| General and administrative expenses | 216 | 287 | ||||||
| Directors' fees | 35 | 39 | ||||||
| Expenses before base management fee and incentive fee waivers | 8,788 | 7,696 | ||||||
| Incentive fee waivers | — | (117 | ) | |||||
| Total expenses, net of base management fee and incentive fee waivers | 8,788 | 7,579 | ||||||
| Net investment income before income taxes | 7,128 | 5,416 | ||||||
| Income taxes, including excise taxes | 868 | 402 | ||||||
| Net investment income | 6,260 | 5,014 | ||||||
| Net gain (loss): | ||||||||
| Net realized gain (loss): | ||||||||
| Non-controlled/non-affiliate company investments | (1,666 | ) | 20 | |||||
| Non-controlled affiliate company investments | (1 | ) | — | |||||
| Foreign currency forward contracts | 38 | 19 | ||||||
| Foreign currency and other transactions | (1 | ) | (28 | ) | ||||
| Net realized gain (loss) | (1,630 | ) | 11 | |||||
| Net change in unrealized gain (loss): | ||||||||
| Non-controlled/non-affiliate company investments | (1,049 | ) | (9,375 | ) | ||||
| Non-controlled affiliate company investments | (4,186 | ) | (910 | ) | ||||
| Controlled affiliate company investments | (1,007 | ) | (3,159 | ) | ||||
| Foreign currency forward contracts | 863 | 1,056 | ||||||
| Foreign currency and other transactions | — | (1 | ) | |||||
| Net change in unrealized gain (loss) | (5,379 | ) | (12,389 | ) | ||||
| Net gain (loss) | (7,009 | ) | (12,378 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | $ | (749 | ) | $ | (7,364 | ) | ||
| Per common share data: | ||||||||
| Net investment income per share - basic and diluted | $ | 0.29 | $ | 0.23 | ||||
| Net increase (decrease) in net assets resulting from operations per share - basic and diluted | $ | (0.03 | ) | $ | (0.34 | ) | ||
| Weighted average common shares outstanding - basic and diluted | 21,666 | 21,666 | ||||||
Additional Supplemental Information:
The composition of the Company’s investment income was as follows (in thousands):
| For the quarter ended | ||||||||
| Interest income | $ | 12,491 | $ | 9,026 | ||||
| Payment-in-kind interest income | 1,240 | 1,397 | ||||||
| Dividend income | 1,051 | 1,048 | ||||||
| Fee income | 412 | 1,192 | ||||||
| Prepayment gain (loss) | 495 | 65 | ||||||
| Accretion of discounts and amortization of premiums | 227 | 267 | ||||||
| Total investment income | $ | 15,916 | $ | 12,995 | ||||
The composition of the Company’s interest expense and other debt financing expenses was as follows (in thousands):
| For the quarter ended | ||||||||
| Interest expense - revolving credit facility | $ | 2,186 | $ | 1,731 | ||||
| Interest expense - 2026 Notes | 1,555 | 1,555 | ||||||
| Amortization of deferred financing costs | 522 | 490 | ||||||
| Total interest and other debt financing expenses | $ | 4,263 | $ | 3,776 | ||||
ABOUT
About
Monroe has been recognized by both its peers and investors with various awards including Global M&A Network as the 2022 Small Mid-Markets Lender of the Year,
FORWARD-LOOKING STATEMENTS
This press release may contain certain forward-looking statements. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company’s control, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future. Such statements speak only as of the time when made, and the Company undertakes no obligation to update any such statement now or in the future.
SOURCE: Monroe Capital Corporation
| Investor Contact: | ||
| Chief Investment Officer and Chief Financial Officer | ||
| (312) 598-8401 | ||
| Email: msolimene@monroecap.com | ||
| Media Contact: | ||
| (617) 391-0790 ext. 123 | ||
| Email: margaret.chase@backbaycommunications.com |
Source: Monroe Capital Corporation