Results for the Quarter and Fiscal Year Ended
- Net investment income per share for the quarter was
$0.46 , compared to$0.43 for the quarter endedSeptember 30, 2023 - Net asset value per share as of the end of the quarter was
$15.41 , compared to$15.28 as ofSeptember 30, 2023 , an increase of 0.9% due to net investment income in excess of the dividend and a net gain on the portfolio - New investment commitments made during the quarter totaled
$175 million (1) - Gross fundings, excluding revolver fundings(2), totaled
$114 million for the quarter - Net repayments, including revolvers(2), totaled
$47 million for the quarter - Net leverage(3) was 1.34x as of
December 31, 2023 - Declared a dividend of
$0.38 per share for the quarter endingDecember 31, 2023 (4) - Completed Collateralized Loan Obligation (“CLO”) transaction, MFIC Bethesda CLO 1 LLC, a
$402 million CLO secured by middle market loans inNovember 2023 - Issued
$80.0 million of 8.0% unsecured notes due 2028 inDecember 2023 - Filed a registration statement and preliminary joint proxy statement / prospectus in connection with the previously announced merger agreements pursuant to which, subject to certain stockholder approvals and customary closing conditions,
Apollo Senior Floating Rate Fund Inc. andApollo Tactical Income Fund Inc. will merge with and intoMidCap Financial Investment Corporation
On
Mr.
Mr.
___________________
(1) | Commitments made for the corporate lending portfolio. | |
(2) | During the quarter ended | |
(3) | The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. | |
(4) | The dividend is payable on | |
FINANCIAL HIGHLIGHTS
($ in billions, except per share data) | 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
Total assets | $ | 2.50 | $ | 2.46 | $ | 2.50 | $ | 2.49 | $ | 2.53 | ||||||||||
Investment portfolio (fair value) | $ | 2.33 | $ | 2.37 | $ | 2.41 | $ | 2.39 | $ | 2.40 | ||||||||||
Debt outstanding | $ | 1.46 | $ | 1.43 | $ | 1.48 | $ | 1.47 | $ | 1.48 | ||||||||||
Net assets | $ | 1.01 | $ | 0.99 | $ | 0.99 | $ | 0.99 | $ | 0.99 | ||||||||||
Net asset value per share | $ | 15.41 | $ | 15.28 | $ | 15.20 | $ | 15.18 | $ | 15.10 | ||||||||||
Debt-to-equity ratio | 1.45 x | 1.44 x | 1.49 x | 1.48 x | 1.50 x | |||||||||||||||
Net leverage ratio (1) | 1.34 x | 1.40 x | 1.45 x | 1.41 x | 1.41 x |
____________________
(1) The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
PORTFOLIO AND INVESTMENT ACTIVITY
Three Months Ended | Nine Months Ended | Twelve Months Ended | |||||||||||||||||||||||
(in millions)* | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Investments made in portfolio companies | $ | 134.1 | $ | 158.9 | $ | 266.1 | $ | 499.6 | $ | 417.1 | $ | 719.7 | |||||||||||||
Investments sold | — | (27.5 | ) | — | (27.5 | ) | — | (37.2 | ) | ||||||||||||||||
Net activity before repaid investments | 134.1 | 131.4 | 266.1 | 472.1 | 417.1 | 682.4 | |||||||||||||||||||
Investments repaid | (180.7 | ) | (179.1 | ) | (332.8 | ) | (559.1 | ) | (504.3 | ) | (823.7 | ) | |||||||||||||
Net investment activity | $ | (46.5 | ) | $ | (47.7 | ) | $ | (66.8 | ) | $ | (86.9 | ) | $ | (87.2 | ) | $ | (141.2 | ) | |||||||
Portfolio companies, at beginning of period | 149 | 136 | 141 | 139 | 135 | 139 | |||||||||||||||||||
Number of investments in new portfolio companies | 10 | 4 | 24 | 12 | 32 | 18 | |||||||||||||||||||
Number of exited companies | (7 | ) | (5 | ) | (13 | ) | (16 | ) | (15 | ) | (22 | ) | |||||||||||||
Portfolio companies at end of period | 152 | 135 | 152 | 135 | 152 | 135 | |||||||||||||||||||
Number of investments in existing portfolio companies | 48 | 40 | 75 | 78 | 84 | 89 |
____________________
* Totals may not foot due to rounding.
OPERATING RESULTS
Three Months Ended | Nine Months Ended | Twelve Months Ended | ||||||||||||||||||||||
(in millions)* | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Net investment income | $ | 29.8 | $ | 28.0 | $ | 86.5 | $ | 74.1 | $ | 116.0 | $ | 101.0 | ||||||||||||
Net realized and change in unrealized gains (losses) | 3.5 | (26.7 | ) | 2.1 | (51.2 | ) | 2.8 | (73.9 | ) | |||||||||||||||
Net increase in net assets resulting from operations | $ | 33.3 | $ | 1.3 | $ | 88.6 | $ | 22.9 | $ | 118.8 | $ | 27.2 | ||||||||||||
(per share)* (1) | ||||||||||||||||||||||||
Net investment income on per average share basis | $ | 0.46 | $ | 0.43 | $ | 1.33 | $ | 1.15 | $ | 1.78 | $ | 1.57 | ||||||||||||
Net realized and change in unrealized gain (loss) per share | 0.05 | (0.41 | ) | 0.03 | (0.79 | ) | 0.04 | (1.15 | ) | |||||||||||||||
Earnings per share — basic | $ | 0.51 | $ | 0.02 | $ | 1.36 | $ | 0.36 | $ | 1.82 | $ | 0.42 |
____________________
* Totals may not foot due to rounding.
(1) Based on the weighted average number of shares outstanding for the period presented.
SHARE REPURCHASE PROGRAM *
During the three months ended
Since the inception of the share repurchase program and through
* Share figures have been adjusted for the 1-for-3 reverse stock split which was completed after market close on
LIQUIDITY
As of
CONFERENCE CALL / WEBCAST AT
The Company will host a conference call on
SUPPLEMENTAL INFORMATION
The Company provides a supplemental information package to offer more transparency into its financial results and make its reporting more informative and easier to follow. The supplemental package is available in the Shareholders section of the Company’s website under Presentations at www.midcapfinancialic.com.
Our portfolio composition and weighted average yields as of
2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||
Portfolio composition, at fair value: | |||||||||||||||
First lien secured debt | 89% | 88% | 88% | 89% | 89% | ||||||||||
Second lien secured debt | 1% | 3% | 3% | 3% | 3% | ||||||||||
Total secured debt | 90% | 91% | 91% | 92% | 92% | ||||||||||
Unsecured debt | —% | —% | 0% | 0% | 0% | ||||||||||
Structured products and other | 2% | 2% | 2% | 0% | 0% | ||||||||||
Preferred equity | 1% | 1% | 1% | 2% | 2% | ||||||||||
Common equity/interests and warrants | 7% | 6% | 6% | 6% | 6% | ||||||||||
Weighted average yields, at amortized cost (1): | |||||||||||||||
First lien secured debt (2) | 12.1% | 11.9% | 11.7% | 11.4% | 10.8% | ||||||||||
Second lien secured debt (2) | 13.7% | 14.4% | 14.2% | 13.7% | 13.2% | ||||||||||
Total secured debt (2) | 12.1% | 12.0% | 11.8% | 11.4% | 10.9% | ||||||||||
Unsecured debt portfolio (2) | —% | —% | 10.0% | 10.0% | 10.0% | ||||||||||
Total debt portfolio (2) | 12.1% | 12.0% | 11.8% | 11.4% | 10.9% | ||||||||||
Total portfolio (3) | 10.1% | 10.1% | 10.0% | 9.7% | 9.3% | ||||||||||
Interest rate type, at fair value (4): | |||||||||||||||
Fixed rate amount | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | |||||
Floating rate amount | $ | 2.0 billion | $ | 2.0 billion | $ | 2.1 billion | $ | 2.1 billion | $ | 2.0 billion | |||||
Fixed rate, as percentage of total | 0% | 0% | 0% | 0% | 0% | ||||||||||
Floating rate, as percentage of total | 100% | 100% | 100% | 100% | 100% | ||||||||||
Interest rate type, at amortized cost (4): | |||||||||||||||
Fixed rate amount | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | |||||
Floating rate amount | $ | 2.0 billion | $ | 2.1 billion | $ | 2.1 billion | $ | 2.1 billion | $ | 2.0 billion | |||||
Fixed rate, as percentage of total | 0% | 0% | 0% | 0% | 0% | ||||||||||
Floating rate, as percentage of total | 100% | 100% | 100% | 100% | 100% |
(1) | An investor’s yield may be lower than the portfolio yield due to sales loads and other expenses. | |
(2) | Exclusive of investments on non-accrual status. | |
(3) | Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status. | |
(4) | The interest rate type information is calculated using the Company’s corporate debt portfolio and excludes aviation and investments on non-accrual status. | |
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (In thousands, except share and per share data) | ||||||||
2023 | 2022 | |||||||
Assets | ||||||||
Investments at fair value: | ||||||||
Non-controlled/non-affiliated investments (cost — | $ | 1,936,327 | $ | 1,960,199 | ||||
Non-controlled/affiliated investments (cost — | 77,528 | 49,141 | ||||||
Controlled investments (cost — | 320,344 | 388,780 | ||||||
Cash and cash equivalents | 93,575 | 84,713 | ||||||
Foreign currencies (cost — | 28,553 | 2,378 | ||||||
Receivable for investments sold | 2,796 | 3,100 | ||||||
Interest receivable | 21,441 | 17,169 | ||||||
Dividends receivable | 1,327 | 4,836 | ||||||
Deferred financing costs | 19,435 | 13,403 | ||||||
Prepaid expenses and other assets | 5 | 1,797 | ||||||
Total Assets | $ | 2,501,331 | $ | 2,525,516 | ||||
Liabilities | ||||||||
Debt | $ | 1,462,267 | $ | 1,483,394 | ||||
Distributions payable | — | 24,217 | ||||||
Management and performance-based incentive fees payable | 10,729 | 9,060 | ||||||
Interest payable | 14,494 | 13,546 | ||||||
Accrued administrative services expense | 1,657 | 748 | ||||||
Other liabilities and accrued expenses | 6,874 | 6,445 | ||||||
Total Liabilities | $ | 1,496,021 | $ | 1,537,410 | ||||
Commitments and contingencies (Note 9) | ||||||||
Net Assets | $ | 1,005,310 | $ | 988,106 | ||||
Net Assets | ||||||||
Common stock, | $ | 65 | $ | 65 | ||||
Capital in excess of par value | 2,103,718 | 2,107,120 | ||||||
Accumulated under-distributed (over-distributed) earnings | (1,098,473 | ) | (1,119,079 | ) | ||||
Net Assets | $ | 1,005,310 | $ | 988,106 | ||||
Net Asset Value Per Share | $ | 15.41 | $ | 15.10 |
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | ||||||||||||
Twelve Months Ended | Nine Months Ended | Twelve Months Ended March 31, | ||||||||||
2023 | 2022 | 2022 | ||||||||||
Investment Income | ||||||||||||
Non-controlled/non-affiliated investments: | ||||||||||||
Interest income (excluding Payment-in-kind (“PIK”) interest income) | $ | 249,102 | $ | 143,564 | $ | 164,878 | ||||||
Dividend income | 409 | 61 | 560 | |||||||||
PIK interest income | 2,012 | 1,156 | 2,652 | |||||||||
Other income | 3,727 | 2,234 | 5,060 | |||||||||
Non-controlled/affiliated investments: | ||||||||||||
Interest income (excluding PIK interest income) | 1,126 | 363 | 190 | |||||||||
Dividend income | 1,010 | 718 | 1,290 | |||||||||
PIK interest income | 125 | 58 | 71 | |||||||||
Other income | — | — | — | |||||||||
Controlled investments: | ||||||||||||
Interest income (excluding PIK interest income) | 17,892 | 25,530 | 35,043 | |||||||||
Dividend income | — | — | 2,059 | |||||||||
PIK interest income | 869 | 1,448 | 1,352 | |||||||||
Other income | 250 | 477 | — | |||||||||
Total Investment Income | $ | 276,522 | $ | 175,609 | $ | 213,155 | ||||||
Expenses | ||||||||||||
Management fees | $ | 17,369 | $ | 26,621 | $ | 36,142 | ||||||
Performance-based incentive fees | 24,565 | 5,691 | 11,681 | |||||||||
Interest and other debt expenses | 104,198 | 59,363 | 55,020 | |||||||||
Administrative services expense | 5,840 | 4,188 | 5,835 | |||||||||
Other general and administrative expenses | 10,131 | 6,551 | 9,106 | |||||||||
Total expenses | 162,103 | 102,414 | 117,784 | |||||||||
Management and performance-based incentive fees waived | — | — | — | |||||||||
Performance-based incentive fee offset | (274 | ) | (178 | ) | (247 | ) | ||||||
Expense reimbursements | (1,306 | ) | (770 | ) | (343 | ) | ||||||
Net Expenses | $ | 160,523 | $ | 101,466 | $ | 117,194 | ||||||
Net Investment Income | $ | 115,999 | $ | 74,143 | $ | 95,961 | ||||||
Net Realized and Change in Unrealized Gains (Losses) | ||||||||||||
Net realized gains (losses): | ||||||||||||
Non-controlled/non-affiliated investments | $ | 131 | $ | 1,977 | $ | 2,977 | ||||||
Non-controlled/affiliated investments | — | (2,224 | ) | 541 | ||||||||
Controlled investments | — | (69,265 | ) | (65,299 | ) | |||||||
Foreign currency transactions | 69 | 273 | (5,586 | ) | ||||||||
Net realized gains (losses) | 200 | (69,239 | ) | (67,367 | ) | |||||||
Net change in unrealized gains (losses): | ||||||||||||
Non-controlled/non-affiliated investments | (1,326 | ) | (35,113 | ) | 2,184 | |||||||
Non-controlled/affiliated investments | 3,799 | (5,008 | ) | 15,398 | ||||||||
Controlled investments | 2,636 | 53,726 | 27,010 | |||||||||
Foreign currency translations | (2,548 | ) | 4,431 | 9,178 | ||||||||
Net change in unrealized gains (losses) | 2,561 | 18,036 | 53,770 | |||||||||
Net Realized and Change in Unrealized Gains (Losses) | $ | 2,761 | $ | (51,203 | ) | $ | (13,597 | ) | ||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 118,760 | $ | 22,940 | $ | 82,364 | ||||||
Earnings (Loss) Per Share — Basic | 1.82 | 0.36 | 1.28 | |||||||||
Important Information
Investors are advised to carefully consider the investment objective, risks, charges and expenses of the Company before investing. The prospectus dated
The information in the prospectus and in this announcement is not complete and may be changed. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
Past performance is not indicative of, or a guarantee of, future performance. The performance and certain other portfolio information quoted herein represents information as of dates noted herein. Nothing herein shall be relied upon as a representation as to the future performance or portfolio holdings of the Company. Investment return and principal value of an investment will fluctuate, and shares, when sold, may be worth more or less than their original cost. The Company’s performance is subject to change since the end of the period noted in this report and may be lower or higher than the performance data shown herein.
About
About
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: future operating results of MFIC, AFT and AIF, and distribution projections; business prospects of MFIC, AFT and AIF, and the prospects of their portfolio companies, if applicable; and the impact of the investments that MFIC, AFT and AIF expect 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) the ability of the parties to consummate one or both of the Mergers contemplated by the Agreement and Plan of Merger among MFIC, AFT and certain other parties thereto and the Agreement and Plan of Merger among MFIC, AIF and certain other parties thereto on the expected timeline, or at all; (ii) the expected synergies and savings associated with the Mergers; (iii) the ability to realize the anticipated benefits of the Mergers, including the expected elimination of certain expenses and costs due to the Mergers; (iv) the percentage of the stockholders of MFIC, AFT and AIF voting in favor of the applicable Proposals (as defined below); (v) the possibility that competing offers or acquisition proposals will be made; (vi) the possibility that any or all of the various conditions to the consummation of the Mergers may not be satisfied or waived; (vii) risks related to diverting management’s attention from ongoing business operations; (viii) the combined company’s plans, expectations, objectives and intentions, as a result of the Mergers; (ix) any potential termination of one or both merger agreements; (x) the future operating results and net investment income projections of MFIC, AFT and AIF or, following the closing of one or both of the Mergers, the combined company; (xi) the ability of MFIC Adviser to implement MFIC Adviser’s future plans with respect to the combined company; (xii) the ability of MFIC Adviser and its affiliates to attract and retain highly talented professionals; (xiii) the business prospects of MFIC, AFT and AIF or, following the closing of one or both of the Mergers, the combined company and the prospects of their portfolio companies; (xiv) the impact of the investments that MFIC, AFT and AIF or, following the closing of one or both of the Mergers, the combined company expect to make; (xv) the ability of the portfolio companies of MFIC, AFT and AIF or, following the closing of one or both of the Mergers, the combined company to achieve their objectives; (xvi) the expected financings and investments and additional leverage that MFIC, AFT and AIF or, following the closing of one or both of the Mergers, the combined company may seek to incur in the future; (xvii) the adequacy of the cash resources and working capital of MFIC, AFT and AIF or, following the closing of one or both of the Mergers, the combined company; (xviii) the timing of cash flows, if any, from the operations of the portfolio companies of MFIC, AFT and AIF or, following the closing of one or both of the Mergers, the combined company; (xix) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); and (xx) the risk that stockholder litigation in connection with one or both of the Mergers may result in significant costs of defense and liability. MFIC, AFT and AIF have based the forward-looking statements included in this press release on information available to them on the date hereof, and they assume no obligation to update any such forward-looking statements. Although MFIC, AFT and AIF undertake 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 they may make directly to you or through reports that MFIC, AFT, and/or AIF in the future may file with the
No Offer or Solicitation
This press release is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this press release is not, and under no circumstances is it to be construed as, an offer to sell or a solicitation of an offer to purchase any securities in MFIC, AFT and AIF or in any fund or other investment vehicle managed by Apollo or any of its affiliates.
Additional Information and Where to Find It
This press release relates to the proposed Mergers and certain related matters (the “Proposals”). In connection with the Proposals, MFIC, AFT, and AIF will file with the
Participants in the Solicitation
MFIC, its directors, certain of its executive officers and certain employees and officers of MFIC Adviser and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the Proposals. Information about the directors and executive officers of MFIC is set forth in its proxy statement for its 2023 Annual Meeting of Stockholders, which was filed with the
Contact
Investor Relations Manager
212.822.0625
ebesen@apollo.com
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