EX-99.1 2 d750826dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

Logan Ridge Finance Corporation Announces

Second Quarter 2024 Financial Results

Reports Solid Results with Total Investment Income of $5.4 Million and Net Investment Income of $0.28 Per Share;

Net Asset Value of $33.13 Per Share

Declared a Distribution of $0.33 Per Share for the Third Quarter of 2024

NEW YORK, August 8, 2024 – Logan Ridge Finance Corporation (“Logan Ridge”, “Logan”, “LRFC”, “Company”, “we”, “us” or “our”) (Nasdaq: LRFC) announced today its financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights

 

•  

Total Investment Income increased to $5.4 million for the quarter ended June 30, 2024, from $5.0 million reported for the quarter ended March 31, 2024.

 

•  

Net Investment Income (“NII”) decreased to $0.8 million, or $0.28 per share, for the quarter ended June 30, 2024 as compared to $0.9 million or $0.35 per share reported in the quarter ended March 31, 2024. Net investment income for the current quarter includes $0.3 million, or $0.10 per share, of certain non-recurring incremental professional fees and other expenses.

 

•  

Net asset value decreased to $33.13 per share as of June 30, 2024, from $33.71 per share as of March 31, 2024.

 

•  

Made approximately $1.5 million of investments and had approximately $5.6 million in repayments and sales of investments, resulting in net repayments and sales of approximately $4.1 million during the quarter ended June 30, 2024.

Subsequent Events

 

•  

On August 7, 2024, the Company’s Board of Directors approved a third quarter distribution of $0.33 per share, payable on August 30, 2024 to stockholders of record as of August 22, 2024.

Management Commentary

Ted Goldthorpe, Chief Executive Officer and President of Logan Ridge, said, “I am pleased to announce another solid quarter and half year of financial performance for Logan Ridge. The first half results are highlighted by net deployment of $4.8 million, along with an increase in total investment income during the second quarter of $0.4 million to $5.4 million. The underlying credit performance of our portfolio has remained strong, with no new investments being placed on non-accrual status during the quarter.

Further, the Company’s strong financial position and the outlook for the long-term earnings power of the portfolio has allowed the Board of Directors to approve a dividend of $0.33 per share for the third quarter of 2024.

Looking forward to the second half of 2024, we continue to see attractive opportunities in our pipeline to deploy our available capital. We believe we are well positioned to continue to support the growth of our existing portfolio companies and we will remain opportunistic deployers of capital in the current market environment.”

 

1

Selected Financial Information

 

•  

Total investment income for the quarter ended June 30, 2024, increased by $0.1 million, to $5.4 million, compared to $5.3 million for the second quarter of 2023.

 

•  

Total operating expenses for the quarter ended June 30, 2024, increased by $0.3 million, to $4.6 million, compared to $4.3 million for the second quarter of 2023. Total operating expenses for the second quarter of 2024 includes $0.3 million of certain non-recurring incremental professional fees and other expenses.

 

•  

Net investment income for the quarter ended June 30, 2024, was $0.8 million, or $0.28 per share, compared to $1.0 million, or $0.38 per share, for the second quarter of 2023. Net investment income for the quarter ended June 30, 2024 includes $0.3 million, or $0.10 per share, of certain non-recurring incremental professional fees and other expenses.

 

•  

Net asset value as of June 30, 2024, was $88.7 million, or $33.13 per share, compared to $90.2 million, or $33.71 per share, as of March 31, 2024.

 

•  

Cash and cash equivalents as of June 30, 2024, were $4.3 million compared to $8.3 million as of March 31, 2024.

 

•  

The investment portfolio as of June 30, 2024, consisted of investments in 61 portfolio companies with a fair value of approximately $195.6 million. This compares to 62 portfolio companies with a fair value of approximately $200.1 million as of March 31, 2024.

 

•  

Deployment was judicious and prudent during the quarter ended June 30, 2024. During the quarter, the Company made approximately $1.5 million in investments and had $5.6 million in repayments and sales of investments, resulting in net repayments and sales of approximately $4.1 million for the quarter.

 

•  

The debt investment portfolio as of June 30, 2024 represented 80.0% of the fair value of the total portfolio, with a weighted average annualized yield of approximately 11.4% (excluding income from non-accruals and collateralized loan obligations), compared to a debt investment portfolio of approximately 80.8% with a weighted average annualized yield of approximately 11.4% (excluding income from non-accruals and collateralized loan obligations) as of March 31, 2024. As of June 30, 2024, 11.9% of the fair value of the debt investment portfolio was bearing a fixed rate of interest, compared to 11.5% of the fair value of the debt investment portfolio as of March 31, 2024.

 

•  

Non-Accruals: As of June 30, 2024, the Company had debt investments in three portfolio companies on non-accrual status with an amortized cost and fair value of $17.2 million and $10.1 million, respectively, representing 8.5% and 5.2% of the investment portfolio’s amortized cost and fair value, respectively. This compares to debt investments in the same three portfolio companies on non-accrual status with an aggregate amortized cost and fair value of $17.2 million and $10.6 million, respectively, representing 8.3% and 5.3% of the investment portfolio’s amortized cost and fair value, respectively, at March 31, 2024.

 

•  

Asset coverage ratio as of June 30, 2024 was 176%.

Results of Operations

Our operating results for the three and six months ended June 30, 2024 and June 30, 2023 were as follows (dollars in thousands):

 

     For the Three Months Ended June 30,      For the Six Months Ended June 30,  
     2024      2023      2024      2023  

Total investment income

    $ 5,370      $ 5,344      $ 10,373      $ 10,600  

Total expenses

      4,620        4,305        8,676        8,488  
  

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income

      750        1,039        1,697        2,112  

Net realized gain (loss) on investments

      (200 )       (2,362 )       87        (3,868 ) 

Net change in unrealized appreciation (depreciation) on investments

      (1,092 )       4,563        (417 )       4,346  

Net realized gain (loss) on extinguishment of debt

      (116 )       —         (174 )       —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in net assets resulting from operations

    $ (658 )     $ 3,240      $ 1,193      $ 2,590  
  

 

 

     

 

 

     

 

 

     

 

 

  

Investment income

The composition of our investment income for the three and six months ended June 30, 2024 and June 30, 2023 was as follows (dollars in thousands):

 

     For the Three Months Ended June 30,      For the Six Months Ended June 30,  
     2024      2023      2024      2023  

Interest income

    $ 4,635      $ 4,907      $ 9,268      $ 9,675  

Payment-in-kind interest

      518        319        871        783  

Dividend income

      17        19        34        33  

Other income

      200        99        200        109  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total investment income

    $ 5,370      $ 5,344      $ 10,373      $ 10,600  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

2

Fair Value of Investments

The composition of our investments as of June 30, 2024 and December 31, 2023, at amortized cost and fair value of investments was as follows (dollars in thousands):

 

June 30, 2024    Investments at
Amortized Cost		      Amortized Cost
Percentage of
Total Portfolio		     Investments at
Fair Value		      Fair Value
Percentage of
Total Portfolio		  

First Lien Debt

    $ 133,516        65.8 %    $ 125,133        64.0 % 

Second Lien Debt

      9,352        4.6 %      8,012        4.1 % 

Subordinated Debt

      26,893        13.3 %      23,218        11.9 % 

Collateralized Loan Obligations

      1,770        0.9 %      1,596        0.8 % 

Joint Venture

      393        0.2 %      407        0.2 % 

Equity

      30,906        15.2 %      37,187        19.0 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 202,830        100.0 %    $ 195,553        100.0 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

 

December 31, 2023    Investments at
Amortized Cost		      Amortized Cost
Percentage of
Total Portfolio		     Investments at
Fair Value		      Fair Value
Percentage of
Total Portfolio		  

First Lien Debt

    $ 128,537        65.4 %    $ 124,007        65.4 % 

Second Lien Debt

      8,968        4.6 %      7,918        4.2 % 

Subordinated Debt

      26,573        13.5 %      23,548        12.4 % 

Collateralized Loan Obligations

      1,600        0.8 %      1,600        0.8 % 

Joint Venture

      440        0.2 %      450        0.2 % 

Equity

      30,400        15.5 %      32,135        17.0 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 196,518        100.0 %    $ 189,658        100.0 % 
  

 

 

     

 

 

    

 

 

     

 

 

  

Interest Rate Risk

Based on our consolidated statements of assets and liabilities as of June 30, 2024, the following table shows the annual impact on net income (excluding the potential related incentive fee impact) of base rate changes in interest rates (considering interest rate floors for variable rate securities), assuming no changes in our investment and borrowing structure (dollars in thousands):

 

Basis Point Change

    Increase
(decrease) in
interest income		      (Increase)
decrease in
interest expense		      Increase
(decrease) in
net income		  

Up 300 basis points

    $ 4,392      $ (1,620 )     $ 2,772  

Up 200 basis points

      2,928        (1,080 )       1,848  

Up 100 basis points

      1,464        (540 )       924  

Down 100 basis points

      (1,464 )       540        (924 ) 

Down 200 basis points

      (2,928 )       1,080        (1,848 ) 

Down 300 basis points

      (4,307 )       1,620        (2,687 ) 

Conference Call and Webcast

We will hold a conference call on Friday, August 9, 2024, at 11:00 a.m. Eastern Time to discuss the second quarter 2024 financial results. Stockholders, prospective stockholders, and analysts are welcome to listen to the call or attend the webcast.

To access the conference call, please dial (646) 307-1963 approximately 10 minutes prior to the start of the call and use the conference ID 4533143.

A replay of this conference call will be available shortly after the live call through August 16, 2024.

A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company’s website www.loganridgefinance.com in the Investor Resources section under Events and Presentations. The webcast can also be accessed by clicking the following link: https://edge.media-server.com/mmc/p/wk9wbtnf. The online archive of the webcast will be available on the Company’s website shortly after the call.

 

3

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 www.loganridgefinance.com.

About Mount Logan Capital Inc.

Mount Logan Capital Inc. (“MLC”) is an alternative asset management company that is focused on public and private debt securities in the North American market. MLC seeks to source and actively manage loans and other debt-like securities with credit-oriented characteristics. MLC 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 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. For more information, please visit www.bcpartners.com.

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, 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, 3rd Floor

New York, NY 10022

Brandon Satoren

Chief Financial Officer

Brandon.Satoren@bcpartners.com 

(212) 891-2880

Lena Cati

The Equity Group Inc.

lcati@equityny.com

(212) 836-9611

Val Ferraro

The Equity Group Inc.

vferraro@equityny.com

(212) 836-9633

 

4

Logan Ridge Finance Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

     As of June 30,
2024		     As of December 31,
2023		  
     (unaudited)        

ASSETS

     

Investments at fair value:

     

Non-control/non-affiliate investments (amortized cost of $172,733 and $170,972, respectively)

    $ 157,181     $ 161,880  

Affiliate investments (amortized cost of $30,097 and $25,546, respectively)

      38,372       27,778  
  

 

 

    

 

 

  

Total investments at fair value (amortized cost of $202,830 and $196,518, respectively)

      195,553       189,658  

Cash and cash equivalents

      4,284       3,893  

Interest and dividend receivable

      2,017       1,374  

Prepaid expenses

      1,783       2,163  

Other assets

      687       —   
  

 

 

    

 

 

  

Total assets

    $ 204,324     $ 197,088  
  

 

 

    

 

 

  

LIABILITIES

     

2026 Notes (net of deferred financing costs and original issue discount of $876 and $1,057, respectively)

    $ 49,124     $ 48,943  

2032 Convertible Notes (net of deferred financing costs and original issue discount of $751 and $999, respectively)

      11,249       14,001  

KeyBank Credit Facility (net of deferred financing costs of $812 and $982, respectively)

      52,293       38,571  

Management and incentive fees payable

      909       869  

Interest and financing fees payable

      1,092       949  

Accounts payable and accrued expenses

      996       833  

Payable for unsettled trades

      —        3,747  
  

 

 

    

 

 

  

Total liabilities

    $ 115,663     $ 107,913  
  

 

 

    

 

 

  

Commitments and contingencies

     

NET ASSETS

     

Common stock, par value $0.01, 100,000,000 shares of common stock authorized, 2,676,062 and 2,674,698 shares of common stock issued and outstanding, respectively

    $ 27     $ 27  

Capital in excess of par value

      188,437       188,405  

Total distributable loss

      (99,803 )      (99,257 ) 
  

 

 

    

 

 

  

Total net assets

    $ 88,661     $ 89,175  
  

 

 

    

 

 

  

Total liabilities and net assets

    $ 204,324     $ 197,088  
  

 

 

    

 

 

  

Net asset value per share

    $ 33.13     $ 33.34  

 

5

Logan Ridge Finance Corporation

Consolidated Statements of Operations

(in thousands, except share and per share data)

 

     For the Three Months Ended June 30,     For the Six Months Ended June 30,  
     2024     2023     2024     2023  

INVESTMENT INCOME

         

Interest income:

         

Non-control/non-affiliate investments

    $ 4,526     $ 4,773     $ 9,159     $ 9,377  

Affiliate investments

      109       134       109       298  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      4,635       4,907       9,268       9,675  
  

 

 

    

 

 

    

 

 

    

 

 

  

Payment-in-kind interest and dividend income:

         

Non-control/non-affiliate investments

      476       271       812       687  (1) 

Affiliate investments

      42       48       59       96  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total payment-in-kind interest and dividend income

      518       319       871       783  
  

 

 

    

 

 

    

 

 

    

 

 

  

Dividend income:

         

Affiliate investments

      17       19       34       33  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total dividend income

      17       19       34       33  
  

 

 

    

 

 

    

 

 

    

 

 

  

Other income:

         

Non-control/non-affiliate investments

      46       99       46       109  

Affiliate investments

      154       —        154       —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total other income

      200       99       200       109  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total investment income

      5,370       5,344       10,373       10,600  
  

 

 

    

 

 

    

 

 

    

 

 

  

EXPENSES

         

Interest and financing expenses

      2,303       2,236       4,310       4,305  

Base management fee

      909       946       1,802       1,876  

Directors’ expense

      175       135       325       270  

Administrative service fees

      255       224       456       481  

General and administrative expenses

      978       764       1,783       1,556  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total expenses

      4,620       4,305       8,676       8,488  
  

 

 

    

 

 

    

 

 

    

 

 

  

NET INVESTMENT INCOME

      750       1,039       1,697       2,112  
  

 

 

    

 

 

    

 

 

    

 

 

  

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

         

Net realized gain (loss) on investments:

         

Non-control/non-affiliate investments

      (200 )      (2,362 )      87       (3,868 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net realized gain (loss) on investments

      (200 )      (2,362 )      87       (3,868 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net change in unrealized appreciation (depreciation) on investments:

         

Non-control/non-affiliate investments

      (2,556 )      510       (6,460 )      (740 ) 

Affiliate investments

      1,464       4,053       6,043       5,086  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net change in unrealized appreciation (depreciation) on investments

      (1,092 )      4,563       (417 )      4,346  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total net realized and change in unrealized gain (loss) on investments

      (1,292 )      2,201       (330 )      478  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net realized loss on extinguishment of debt

      (116 )      —        (174 )      —   
  

 

 

    

 

 

    

 

 

    

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

    $ (658 )    $ 3,240     $ 1,193     $ 2,590  
  

 

 

    

 

 

    

 

 

    

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC

    $ (0.25 )    $ 1.20     $ 0.45     $ 0.96  

WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC

      2,676,018       2,703,871       2,677,187       2,707,399  

NET INCREASE (DECREASE) IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – DILUTED

    $ (0.25 )    $ 1.07     $ 0.45     $ 0.94  

WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – DILUTED

      2,676,018       3,243,374       2,677,187       3,246,902  

DISTRIBUTIONS PAID PER SHARE

    $ 0.33     $ 0.22     $ 0.65     $ 0.40  

 

(1) 

During the six months ended June 30, 2023, the Company received $0.2 million of non-recurring income that was paid-in-kind and included in this financial statement line item.

 

6