PNNT - Earnings call transcript Q1 2022 | PennantPark Investment Corporation

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Operator

Good afternoon, and welcome to the PennantPark Investment Corporation's First Fiscal Quarter 2022 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] It is now my pleasure to turn the call over to Mr. Art Penn, Chairman and Chief Executive Officer of PennantPark Investment Corporation. Mr. your begin may you conference. Penn,

Art Penn

Cheung, I'd Good include by PennantPark I'm disclosing welcome Officer. a Richard to some general information of to Corporation's afternoon, joined please first and off by call. discussion everyone. Investment conference fiscal you earnings our Financial statements. call like quarter start Chief our conference today Richard, XXXX forward-looking

Richard Cheung

to this Penn. obtain I'd filings, of at At the SEC at like required may the We ask like PennantPark to recorded. update is website to by filings telephone earnings from to the unless is projections. to to Thank law. everyone To Chairman that of materially recent call visit Safe will be well that projections, time, Today's undertake your back in our not that of being I'd Harbor our most include please the you is as customary call this with Executive us call like call XXX-XXXX. remind the press our so call disclosure we information. PIN also differ copies forward-looking provided our on Corporation, the unauthorized our forward-looking call Please Art. numbers press for strictly Chief cause using release to any release that actual (XXX) forward-looking you, refer factors call these could note conference this in regarding replay our and results our statements broadcast Officer, to latest Investment pennantpark.com call our statements available property attention today's prohibited. as of turn and Audio by in form do any or I'd SEC and also Art and website.

Art Penn

the going capital how to financials minutes discussing I'm liquidity, few quarters, structure for portfolio spend ended our XX, is the we open for it December fared the up the upcoming and in a Q&A. quarter and Thanks, then positioned how Richard.

this starting plan performance equity we dividend shareholder to our are using performance ended We quarter, up in Pantheon, three-part with increase $X.XX from this proceeds to number quarterly which Pivot successful over to in million our the by to our are an next with the per will and months; quarter pleased the increase program, announce $X.XX We engage XX% and quarter. Due the exit per PSLF of one, pleased March stock the JV our the to increase XX. long-term anticipate from three, execution up in program an to number value: investment enhance of in of NII over XX this our buyback share $XX past rotation time.

income $X.XX to Now a XX, in X.X% ended investment per $X.XX including to review share $X.XX went results support quarter $XX.XX net up the $X.XX this of share, increase December NAV. income. per share other per per For the plan? from which share. was We achieved NAV

December was XX, our XX, XX% pre what XXXX. from We was pleased NAV on as particularly that it XXXX, COVID December are of up

next expected sold a in in been As Network. of press part in Pivot of increase is will weeks. Pivot the the filing transaction you close of that the to PT It's Therapy, few Physical Therapy. see XX-Q, is our or value Athletico investment in our being Physical This the substantial to

common cash investments $XX approximately on preferred proceeds We million Pivot. and in our of million will $XXX generate stock

the Athletico we'll investment. from We will combination redemption believe company. also receive in the million and in Pivot, $XX We invest the $XX and our of of of million second-lien equity

our the the loans exit down the to for portfolio the Pro portfolio invest that percentage be of portion will our cash to net XX% its income. portfolio of was been equity of of we've a of equity March will be last targeting investment in peak, increase proceeds At Pivot, the XX%. Over years, forma using couple XXXX. and of reduction on equity to XX,

well as the investments $XXX Our such equal from exit, The successful XX, such Pros, continues from million Edison, successful peak as proceeds our the of long-term the are Including outcomes to $XXX Pivot. and Pivot exits XXXX DecoPac, of will restructuring equity as March Wheel the since equity approximately target a co-investment program as combination on million. Walker be Jupiter WBD XX%. Summit

investments debt to side As part by in of co-invest choose equity the alongside business selectively with model, financial side our the we we the make, sponsor.

In regard to from investments net times a JV which investment our want pay approximately the includes: portfolio returns about co-investment million a of our lenders, from and our may $XXX of ratio understand middle cash through long-term we of equity; and and on Our X.X out have over to sheet the to where generated over instruments. platform rotate XX% time. target securitization; for with PNNT With million returns move IRR additional on a equity XX, inception co-investments balance to strategy, Pantheon differentiation of an number yield equity Overall, our our equity these of opportunity are time $XXX capital multiple times. December our into at from million to Pantheon investors market of have including and leverage balance investments potential number and as world been debt $XXX excellent sheet on to X.XX our growing two, invested through and a have we assets equity co-investments towards clear optimizing of program on PNNT one, assets differentiator. three, our PSLF optimization, a continue income,

an have PSLF end, also million. billion quarter our The Pantheon to $XXX investment million by quarter. $X.XX $XX of and approximately portfolio increase way strategy. $XXX to implementing million grew approximately $XXX from million, from $XXX to We over growth increase Subsequent our on of commitments million. million $XXX the are this we from agreed to to about $X.XX investment PNNT portfolio NII past billion to increased well PSLF's

$XX portion is this million. Our upside of

on the we where generally focused between where market, of think of million which in get EBITDA the million loan package because we we companies with add it's core $XX and market is the EBITDA. risk the are and and target of we as high-yield markets. strongest middle most the million not market compete or to value $XX million We $XX below define We middle does range. a the syndicated threshold the return core like broadly with And $XX

higher As decision compressed. covenants is is such, the wide do information the or equity not cushion are time are lower, frame with less diligence leverage investment rights are markets we and where adjustments making higher, fewer, and for EBITDA light, nonexistent, compete

we market, middle to capital our hand, much On where in focus is the the core the other borrower. generally, important more

we lenders. share loans weeks this just that covenant-light as from protection We protect market. direct among have default is direct competing lower a As an of with XXXX less covenant lenders covenant-light one recovery loans middle in achievable, the and QX higher of heavily than have the the multibillion-dollar QX covenant believe primarily rate we themselves investment the direct with covenant packages, a in eight done and have down typically lending world and in direct According receive have financial growth lower, to XXXX, Less syndicated with be to our than part to increased believe companies S&P, higher, loans ultimately on ramifications outcomes. quarterly of top thoughtful $XX million. maintenance have monthly of meaningful real we protections core well a such, quarter. XX% by $XX a market as company's, six was those leverage to who rate the which XX% road lending driven in core broadly XX% covenants, International, the Virtually of loan loans statements higher in diligent We largest in by loans EBITDA the differentiated mega have the EBITDA market adjustments in to to may than of equity Lincoln to performance. careful to million EBITDA are than the cushion According all compete more important this been make middle decision. important to companies increase meaningful a

strong. remains Our portfolio performance

five ratio, cash income expense, coverage interest average As portfolio of times. was average X.X December and XX, interest was debt-to-EBITDA amount which interest by times, cash exceeds the the in

nonaccruals in our XX on crisis companies and in with This PNNT compares industries. nine to subordinated average inception, have now yield ratio loss track This made different investments, points our about no includes book PSLF. We energy and has XXX the diversified highly invested record The primarily our debt annually. of pandemic. PNNT prior financial is at Since an a portfolio XX%. the to investments strong basis billion $X.X of

million meaningful a achieved took IRR of XX.X% below We where $XX substantially means investments have up to primary X.X%. a step our business today companies our PNNT, EBITDA XXXX of believe analyze the companies. from this companies is and program; the our it in expertise; those technology range. are capital at our we that health such better four prior focus software, below core middle Many where XX-year equity energy verticals and a and and of and us our million XXXX. As of other risk-adjusted industry is selection increased important have portfolio care, key as two, is clear best companies in to returns see returns is market factors: $XX number services, we since where number in focus record our four, government more the domain select And cyclicals; excellent in starting consumer to the track due within number on number our XXXX, we've to and market made was expertise. Core IRR. The function EBITDA, investments of middle company and we domain the industries market services we where industry avoidance three, one, results co-investment

benefit RAM has record strong XXXX. flow Energy, and position to from Energy company EBITDA had in RAM XXXX. a to The prices Turning and continues liquidity in revenue, improved cash

RAM upside, the drilled and and horizontal are XX date, Giddings Chalk Fayette held working are to majority all the in the of once NGLs, has To for of current completed revenues. is the its company majority in of further two its enhance hedging acreage. eventual the and be and market oil and wells. wells Austin oil acreage the wells Austin of XXX% gas which of by the comprises the XXX% sale, the and unhedged RAM field And its that acreage. its light of production While cash production. County majority value drilling operator substantially analyzes which These is an December, liquids, will RAM flow of launched In interest producing, a on Chalk weekly, the in to of wells new RAM's

from funded of on All cash is The expenses being the loans for gathering and wells the expansion these system costs new for attractive. and balance related sheet. are outlook

We growing we experienced, in to our ever selective so our and doing flow busy With we new as can producing business, talented reviewing portfolio. that thoughtfully ends that and as deal is have carefully in team, are wide can and active funnel as up we been XX be what then our analyze years in deals.

now through turn to the me CFO, financial results. Richard, us over call take the Let to our

Richard Cheung

you, Art. Thank

per For $X.XX including totaled the quarter ended other income. of per December XX, $X.XX share net income investment share,

full, which credit resulted $X.X some $X.XX categories, XXXX million our million $X.X net of $X.XX and $XX.X share. expenses We on NAV of the million. in general $X.X totaled totaled Change facility of or million. in our realized performance-based And share. provision, per incentive were associated the any per our realized totaled interest $X.XX debt investments, per $X.XX million. tax or redeemed losses our investments $X.X on at loss Unrealized notes share. expense in Net $XX.X and a share. or per decreased gains Looking fees management base expense administrative value of from extinguishment were by million Taxes,

was in $X.XX quarter. $XX.XX per Consequently, dividend excess per per from $X.XX prior share by income our share NAV investment per from share, went of net X.X% to the Our share. up

the broker-dealer senior independent quotes reminder, exit marked where price exchanges, ASC and markets value when Board Directors broker-dealer our to we independent notes investments. are provided firms to each market by quarter the facility by securities are the cases firms, valuation and entire using XXX valuation portfolio, active use of available As quotes inactive, on a independent credit XXX. are our In

cash, ratio, debt-to-equity of GAAP was Our times. X.X net

diversified sources We with near-term have structure funding maturities. strong a and capital no

rate of of of syndicate issuance XX. a of facility million have in notes interest includes million with We banks. in the and revolving ended in maturing the credit $XXX XXXX, X% million quarter maturing notes unsecured $XXX XXXX $XXX with of SBA December million $XX unsecured during XXXX, of XXXX debentures which maturing the

The portfolio across X% first-lien in including PSLF, in a a and On a including rate, floating December XX% XX% invested debt, consisted XX our LIBOR second-lien Our of in overall debt, debt companies of in the subordinated common debt of portfolio was The X%. and X.X%. preferred all secured different equity, floor floor. of secured XX% XX% X% in industries. XX, XXX in average yield has has LIBOR has average which PSLF debt, weighted portfolio X% portfolio is in

Now let to me turn the Art. call back

Art Penn

Thanks, Richard. to To mission. we conclude, our reiterate want

pay the our dedication. primarily Our attractive capital. talented like flow team instruments, those goal for to aligned for our is At cash their in our market and free debt Everything open middle is risk-adjusted to income, I'd out cash call professionals dividends to find to have shareholders. of do long-term your to this less questions. free conversion. would investment you time we to all extremely continued in to goal. risky high of that I today capture We and commitment the That remarks. cash coupled In up and We concludes closing, flows form and flow of companies thank generate time, through us. returns confidence that in we your preservation contractual with try that for like Thank

Operator

We'll first Alexander Instructions] Casey Compass [Operator take question from Point. with our

Casey Alexander

equity that I are on a a goal Hi congratulations your percentage your good on that. to afternoon entitled portfolio. and think lap Networks' of of Congratulations holding reducing and Art, as the outcome. and Truly, to you on PT victory team

Art Penn

Thank you. it. Appreciate

Casey Alexander

kind trying the and same overall time, same instance, into RAM a exit of the it's understand Yes, understand for I in with to strategy, yet we've point that better I sort like trying exit. was you're in PT would a more was the investing were of the It that business business to Network, at capital to it that business. thing. And you been

capital more success. to great and You ultimately with invested buy exit it stores did more

a so And exit, we're increases only somehow? business. producing, results of does larger overall per the trying wells that multiple RAM business strategy more because of that barrels day understand get improve the we're I you're curious really having valuation that the oil that in hopefully the strategy but want really Does understand to a in this field I'm a investing to more. exit not better it to an

Art Penn

Casey. Thanks, Yes.

similarities, is and sometimes; gas. EBITDA we some – on difference we money we situation de dollar between and ultimately get did multiple EBITDA incremental through. oil are is every similarity very optimize thought that more exit a because in somewhat that's RAM, have created create, exit, accretive it of played that on the there the for very acquisitions that and a So bunch physical in. big knew the we could But what high and and did we In And similar. and to more of obviously, you therapy novos tuck-in exits, we a to invested put

can prices, return a IRRs First, of so we're $X dollar, good you new in and get wells. expected themselves on today's that drill really At ground, in the put can the to good on and using that you the accretive. are money wells really

the perhaps field worth So And of playing that the and the it then themselves, some flow, you better the yes, for to proving in worth you're offense buyers. you're economics more attractive potential and field, because expanding to the creates of company. of the better exit you're on extent, cash makes

sense. then, leads So us. it exit exit, a their two of we yes, They're on for it the any And better to irregardless accretive. own makes wells feet, hope

Casey Alexander

noted change market was Would would oil still in Would mean, is had of that – be M&A I indications XXXX. for to year beginning Chalk? record characterize Austin market M&A a from you in the the How RAM in RAM no and press in the releases and characterize you at looking I there interest? or gas

Art Penn

up falling market, $XX, at as it's if it's get a market active, middle fall better. so M&A to bit either stay for XXXX. right think Obviously, gas more getting moving We connected should to market bit, direction. it to place we the at hopefully, set today, oil in and oil continues and be the think little continue a over M&A into it's it's the We little a

Casey Alexander

All is, you're a right. you that say Then let's extent, advocate, to not devil's my a last certain question price that playing getting want.

the up that, we You them and time loan BDC? for but play time. in the might complete the it's what in the online, Main outcome itself rest you to line Street these field. some How cash timeline cash Not what want, At build of of start that you point end that's bring you they're enough in the and that pay that that that outcome could sort point wells, producing instance, with the say, do at perhaps be? we does with dividending out off

Art Penn

question. good a It's

it's could try at Main to this you I on flow you you attractive you put as something every ground, dollar to that, some just that. doing program course, is, And pay point continue, continue PNNT. put the be through of just and timing and prices we up keep can that. to also, pin if generate it good in Look, or good the flow." and is to Fed we point, continue if say, think send a $X And cash to in like make cash we at that loan the off that got Street "Gee,

back down this pay yes, excellent you debt will So is, cash the road can it, at that then wells, is keep don't cash chunks when good know and send we to continues. it of get attractive, how the months market X we I theoretically be, that off look long the and drilling are and or if on And flows BDC. really returns, depends M&A just say depending continue XX out market it the to on then could we'll where the to

Casey Alexander

Network's on thank congratulations PT And questions. taking the outcome. my again, Well, you for

Art Penn

Thanks Casey.

Operator

our to question Robert next go Dodd Raymond James. We'll from with

Robert Dodd

congratulations exit. of can, any, is dividend first, going if success going I the and addition, and repayments, of first, A Hi going mean ones, to terms exit, the Pivot the got but Or detailed any I guys, the Pivot, mean, cash in is with anything on I proceeds then getting couple quarter come couple of NII? there several flow through below to more ones. like any housekeeping be the you that's on there I've or is obviously and last-minute going all in that, line? be income? to to onetime any PNNT fee, are in, to up of it a just

Art Penn

virtually coming of the me in is I'm all and all, It's Yes. if Richard, line. it correct virtually wrong, below

Richard Cheung

yes. is correct, That

Robert Dodd

Got JV? I what at the within target what's it. parent within leverage And the know X.XX then JV? it's the but times the about

Art Penn

you up million guess X:X, if like think our time that $XXX like I something be Look, $XXX to JV to would to taking that X:X. we're and something million, question. have I said us looks Pantheon great a we yes, in That's over commitments expect

Robert Dodd

it, okay. Got

that have on on the did know marked assets and we what right they're equity those loans. you Obviously, Moving get any on down. concerns front? businesses, two debt should coupon more MailSouth. both got trends to down, high-paying PIK of Based marked the Cascade and The now

both pretty the there loan well side, issue So are be is an which still? concern marked on there could any that

Art Penn

still good, and think cushion the But to them for still money the cash. terms marked, obviously, and on and how equity, were they pay I preferred No, valued. them. and and that like And the through debt common various there's being pay markdowns really would indicate there how stocks them the marks I both there's capital, the the go through are were in junior Yes. the want can in them, debt parties accurate they're fairly through of third go we we feel reasons, on to

Robert Dodd

And for last Got Thank you. it. it, got me. one then

I mean; there. laid out you the numbers On co-invest some side, equity

a attractive. I You mean, is time have, IRR do XX% over really

environment still I'm are a an market today, co-invest you sure do mean, special IRR, down? the the you're sustainable right? the to up the firm, XX% obviously, discount do as sustainable, realize do I we you co-invest, multiples terms when PE should in think even question. or the in getting you come in or a in you there's So you're is right, that Or the as –multiples equity, and equity are can not in mean, business, it's that not XX% I today, think expect availability think? you seeing – is necessarily I So a you're do bit that

Art Penn

question Yes. tell. time Look, will and it a is great

for cases, $XX Multiples cases, are part I taking are of or and million capital $XXX a part a by you're And of today. million, large or plan it think, that That in $XX hand. in to selling the million or entrepreneur, pretty a high that's most game EBITDA lot $XX I in equity firm the entrepreneur private or a said, million, owned first company founder, one As equity. institutional There's family. an founder multiples million, $XX a right, we in because million, are to there's on a company $XX EBITDA. private taking are $XX of some million high family

in in of investments is through equity is part a ups partner. where then co-invest very going EBITDA, social good How with to the return the paying the – are as us that debt part to we hand, $XX high you're you're mean, helping our that's growth? multiple, $XX equity get fuel other is to the firm our of million capital. permitting the we're helping of a participating I contract through that a on irregardless co-invest. to the who to growth company million of taking debt equity the that from that drive And the On private

that's and we're should X.X IRR times, of people, X.X about and I as always And through kind and times. how XX% or be something at maybe one we've us extraordinary and kind an thing on as at that I mean, highlighted and we've probably we say the think XX% we're I'd at But the cushion something it's it, excited mean, people. would is like I that. that it's a skeptics, in not XX% debt skeptical X.X type people sustainable? we're gone of Sure. And PennantPark in, been we've all saying, thrilled below it model most kind of So in period. kind it's always of now, thing the credit newer, other been that. we're MOIC of we'd We're and EBITDA, that's business of we're this upper company. of call, this to And partnering like times really $XX last to the where package press our we this million we of first part radar, value middle XXth where honed this handful mega of years most and a kind including we we risk-adjusted as where capital bring covenants. most in is market add add where but about institutional unit-tranches in value, the million the the most seems we best stuff, lot knowledge, $XX on this where of the where year, the of of it the the get mistakes, can can return, be time avoid

we're better. working, time and been working improving better it's it's tell. So in But will getting that feel been I vein. like continuously

Robert Dodd

congrats buyback. quarter, and the the the dividend Thanks. And Thank NAV, on you. the

Operator

question next with is Our Lynch from Ryan KBW.

Ryan Lynch

kind the of long-term on successful of monetizations. else exit It's by importantly, more just of quarter, Hey, the probably join saying equity to really strategy everybody I'll and good the PT great congrats afternoon. nice Network.

exit cash higher-yielding that's that obviously, So back a at and going super But monetization kind coming point, investment. but million. that that to have successful also some – of on lot piece. is or $XXX you, lot non-yielding preferred debt A chunky of a of of equity, though, you also throw

capital QX, to assume off early I get in wanted some here? just net in quarter as shaping or of on Network would quarter. that you XXXX far busy, was up you fourth would in PT assume that XXXX. repayment expect deployment. and capped Obviously, would kind capital strong of I incredibly of big is as the outlook that redeploying calendar portfolio How and very exit expect, growth So thoughts your from on a based And repayment of – a

Art Penn

in main shouldn't yes, it's getting take back about you Yes, have to back and get and NII. it like And this, – one Athletico our of not we obviously, pays it's when our we're see complain right? someone and Sure. take. it know And second-lien thank a you the you because when paid one we'll a as you we're cash. I too a you that business GC we say to on, do predictable complaining, off expensive goals take that is for We'll was big

find We've how to try our type We're going heads to we're of to and put the interest. long-term So on kind it. down – that We're to deployment. not good deals. going not rush can rush seen

the the our what with Pantheon, be selective of of be deployed to down equity. in way into got So JV we're of to $XX going at in and it part the roll for in a deal But quarters. Part it will the head portfolio. it, buyback. and into very methodical, careful comes yes, we're going same deploy the stock million being deployed to we've capital Part careful over put in about coming time, the the Athletico invest, will

of terms levels, a of year. In what kind at particularly God, was, activity XXXX blizzard end the deals, the of my of

year. probably December. going lenders peers, probably deals of still record done are firms, it in an be seasonality-wise year-end. how everyone a from And slow think in our We the us now, be. that feel a level and typical active here heard firms, little I still kind January people year were active you a just who like in will or of accounting those I we're where and other providers, the recovering, whether busy through it's XXXX don't know right will February that of because it's or is law just

levels maybe to XXXX. to deal If there's I we'll and model, early, case of there's but like teams, feel XXXX in pre-COVID. activity kind base they good may still looks It to a to lot like dialogue, be you year our had a an active going talking pick nice have not. mean, we're

Ryan Lynch

Is Okay, guys view of share repurchases? of quarters? sense. do the have the consistent kind guys of your Or kind and you attractiveness of how announced part relative to And deployment, on capital the – on you flows next of four deployment. you How That's one trades capital stock that guys the million kind that share that where you and ebbs that going depending capital view price pretty of over the the point then form $XX program. makes guys guys' plan program? deployment deploying will repurchase and on be

Art Penn

a Yes. think here good certainly of we pieces cheap It's the stock looking it and question. really, historically. But at remains to the think At point, it's where four quarters. course kind also it as and relative done NAV saying going. we still It's we've next of this the really over what I'm equivalent of

right equivalent So it know. I over course of the never the is you about four now bites think we but quarters, think

Ryan Lynch

update? update equity Could from or changed obviously zero, those fair last obviously willing of Would there up one an for to and enough. regarding mean, Cascade. be Okay, And provide then Robert's both MailSouth was you I down just fundamentally, question, the question on you there following valuation drove what a just to there an investments on pretty kind got was either marked of provide marks? something standpoint materially. that so those

Art Penn

Sure.

the a the down in were is slowed Cascade Omicron operations. testing. down. could we're in restricted that operate New So business, slowed certainly really the in crews and The in, particularly jurisdictions in late environmental – soil as of the which not in terms California XXXX soil it really testing Jersey, took testing

MSpark late still retail, change. think through big here company soft. We've is hope of change highly to direct kind of company restaurants in is to sense the in population, as we got we rebound. executed who very But CEO, new XXXX. a a and made execute a that and that think management help plowed Omicron in are XXXX Unfortunately, during to there higher heights and that of late who will it we this brought take management hurt thought business. a certainly we that's So back mail part – COVID its bounces it market but has the which and

Ryan Lynch

Art the successful Okay. Thanks update. my exit. That's helpful again, for on very taking congrats questions again and

Art Penn

Ryan. Thanks,

Operator

Ladenburg. with Our next Schleien Mickey question from

Mickey Schleien

Yes. Good afternoon, Art.

couple a Just of questions.

what have PNNT fund of delayed quarters. timing expectations commitments how your How markets is active consider for currently? that when the at those few we tripled over the commitments are M&A unfunded to And last Your for about draw? are the much

Art Penn

we're have you it's linked revolver we not, my a good sense color your growth it delay do. Richard, these take work any is If call call. companies million in a million, particular know in that is back is Richard, and growth. fuel you $XX with to had a lot to as you I from of draw have related doing we plans of don't $XX what My after question. get the certainly to But lot Yes, it there. these we don't I on answer can if the or to drill fingertips. fingertips,

Richard Cheung

about breakdown call between Yes. and I'd you draw It's precise delay call. No, you after revolver, the back. we'd XX/XX but give

Mickey Schleien

debt performance nicely. multiples? your investment Does My company's understand. reflect or for other I or else the is from that an something Richard. Art, in market question, marked Events is prepayment it fine, like PRA expectation That's

Art Penn

Yes.

here, an we're have here is those mostly very have was kind company, called bounce companies down. are COVID that a And in XXXX. events Companies booking and nicely it's during this PRA corporate to back thankfully, events events. Obviously, So nice corporate optimistic Events. bounced again, of shut we'll it

Mickey Schleien

That's it you quarter's for lot. me. your congratulate And That's management Terrific. a I'd it of like results. to me. on in the also this portfolio for patience Thanks

Art Penn

Mickey. you, Thank

Operator

to our next Jeffries. Joseph with Kyle go We'll question from

Kyle Joseph

Hey, me having questions. thanks my for taking on,

trends sentiment and Let developments of up and follow terms we from performance of get sense just a in? seeing a I find my sort of questions EBITDA to you're seen. level and on been of the the what specifically of portfolio and just high Most in me environment asked. congrats inflationary kind margins, we've given the have wanted terms growth positive in ourselves echo

Art Penn

And to the and increasing most shot we're have is which in nice ourselves their their their labor of Went of of The By better issues, supply means raise question, a good to a of companies always year-over-year had Look, Yes. definition, there's terms up prices. able exist?" seen EBITDA "Does go we've a quarter, pressures, being have in real reason growth. company in around a EBITDA asking a XX%. excess it's in this situation large just margins customers. they're going goods inflationary going means typically are their to they are they prices of so XX%, when which cost up. the because important away the chain

environment, sees costs once of in it's inflation everyone going in this have up. pattern you these – fact everywhere addition, the additional In sees news,

better, we'll others been than raise somewhat have and up, companies protect to earlier up did not performed has our but to catching themselves, earlier – portfolio it for hard prices but ultimately. ones who we'll are have others, catch So

that So And companies that these is quick sometimes like increase. in quick helpful. most anything, our are environments call, of price making relatively action in

Kyle Joseph

Got my it. Thanks helpful for question. Very answering

Art Penn

Kyle. Our J.P. next Operator Melissa with Wedel you, from Thank question Morgan.

Melissa Wedel

back questions I things Good on. to today. you morning. A taking couple Appreciate my wanted of circle

bit First, real margin maybe sort the as we that maybe we reflecting think rotation power earnings on of that? share the little level, dividend somewhere increasing occurring of terms about the a a about of steady-state above time, So sort earnings portfolio? think portfolio the bit little of NII ongoing the a when in dividend $X.XX that's power per of a to should

Art Penn

of on equity going the mean, the see I a PNNT NII. going it's, we earnings and LIBOR see almost the up We'll the to We'll Melissa. scenario see that's $X.XX. then power what – We'll where to JV what of rotation. We very kind go. the NII any run, question, how is. see going the about good have impact and think and we'll in you feel with Yes. covered comfortable We comfortably it's

this was grow So us hopefully over we things on, hopefully for continue and NII. not lots last move the to time of the first different move as going but

Melissa Wedel

Okay, positions a you quarter got it. it, thinking – versus came some couple preceding That's in rotation, are And September of position portfolio gain volatile the we've had mark about today. the mark quarter There very about further in December sequentially. even talked the a names appreciate the in on if equity maybe equity then while the that, helpful. unrealized still have down large a I that. in

other So to about names? cash does impact generate, exit this that, will that size occur on the pace the about how you're that's the the of given thinking of and rotation

Art Penn

of It's control, a had control, time had And of really So the Cana we right? in Like question. control, most time, yes, near have hopefully, good PT, right? the future. Most have don't the we of it control, We control. the big It because related like kind to – been and name. two. bouncing was is which hurt now been of it's week up a has been or but down. been kind in stock it's That's specs, back had

stock, They the are don't public just control. stock so [indiscernible] have and value gets in not So we every in it market.

of time, instruments. and would right at that to the right in cash the So, convert to place, love at we course yield invest

And do That's of where we [indiscernible] off touched when don't big have rattle the don't brand, but name. it's of have we that. and clearly Johnson partners control that's there. we names, control don't. course, we've minority one. where There's Again, can big shareholder, in we we that SOI So fund a do have control the have of we're control on the We identified co-equity with name over. J&F, Frank. We're a that control we

everything that. optimize the power time be a for trying supposed mixed getting do of great that find time goal proceeds the the positions, So going doing. we're long bag, of have what kind our optimizing to but at it's we're of we the a balance of about trying to to in long-term act is equity it's have exiting example And time talked and of that exiting the guess, same is to a challenge, I to of, a at we've goal same balancing and our the to while

Melissa Wedel

Thanks, Art.

Operator

at call remarks. additional session. any to for you or time, back I'll Penn, question-and-answer turn this closing Mr. today's concludes That the

Art Penn

to want the just I call everybody being on for thank today.

call in Ends early will [Call be next May Abruptly]. Our

PennantPark Investment (PNNT) 10 Feb 222022 Q1 Earnings call transcript