LRFC - Earnings call transcript Q3 2021 | Logan Ridge Finance Corporation

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Operator

Good day and thank you for standing by. Welcome to the Logan Ridge Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now speaker hand today, would to conference I first your Jeehae Instructions] like the to over [Operator Linford.

You may begin.

Jeehae Linford

Thank Logan Ridge of the earnings and XX, after welcome conjunction third afternoon, Form A distributed morning, earnings XXXX copy close. was An along an earnings conference you. and Company's quarter call. November release yesterday filed in press market Finance loganridgefinance.com Good Corporation's at press Relations the with presentation, section the SEC. Company's release, the be should with yesterday with in reviewed website XX-Q is to available the Investor on

future Company's SEC. As Please Corporation. or a by involve turn of conference law. go those note over statements I to call forward-looking contain those results this risks a conference number Actual result results forward-looking the and today's from being as of Goldthorpe, call ahead, call a materially may required reminder, described a are unless recorded of assumes Officer Ted may Finance now Logan Executive like statements of of would update Chief any performance with to purposes. obligation Logan that filings in in With which differ forward-looking and for replay Finance statements factors no uncertainties. is guarantees number Corporation the Ridge such including the Ridge to the Ted. that, Please not

Ted Goldthorpe

I'd progress quarter summarizing start Chief we've XXXX Officer, as third completed to to call. Officer, by our by morning, ahead. joined what marks quarter Roos; Chief that earnings lies off the And Ridge Jason Finance. adviser This new our made Patrick and Investment to welcome and today, Logan our Good Financial like our the I'm Schafer. first and today

investment and new discussed We will objectives to-date that, will detail two through you financials. our additional the adviser. activity Jason previously walk the on our immediate Following Patrick provide as

quarter, of third These Partners. of secondly, front, five non-income-producing and the Company's was rotating equity report reposition high-quality, at goal approximately was positions which income-generating BC received $XX.X deleverage those priority valued generated First debt proceeds into key the exiting secured $XX.X companies exposure portfolio is progress as material senior of XX, repositioning made on proceeds I'm And our XXXX. were the book redeploying non-income-producing a which exits to during the capitalization. three successful that June of by and to pleased for the and out optimize investments. equity by Company to million, $XX.X million million from foremost, the originated investments

quarter approximately we to of the million during ended XXXX, companies, September Additionally, XX, made $XX.X of portfolio commitments new of as which quarter end. funded million new was $XX.X six investment

few first increased from result, from the XX% at in portfolio second equity prior a XX% and lien debt quarter, lien our percentage the the debt to value in of prior portfolio as As has decreased fair a a quarter. has decreased that XX% spend and to to XX% quarter, We're addressing the I prior portfolio. during in With very made investment with from the we've progress our income mind, like minutes would quarter. pleased repositioned third in XX% the XX% the to

and declined this by early end but of to deployment driven quarter, large of occurring Our investment the primarily the the exits quarter the at income this was in prior occurring our quarter compared activity bulk quarter.

disciplined good reinvestment always the capital taken of a deploying of stewards no capital, and approach As shareholder Logan exception. is Ridge and prudent underwriters we've

rotation for the make. the and it new proactive transitory, of this is the of intend but we previous we $XX.X sheet We towards the investments expect to to result end that made generally, quarter that funded be loans cash successful commitments had weighted we fully is dynamic the the addition fund million of to largely portfolio. balance quarter, of on expect new to In during the earmarked

Our NII. short debt structure, should XXX% of made additional the reasonably capital in progress respect during we expect a that Company's a in deploy tangible flows reduction the With and which quarter. we robust through time to by drive pipeline, to the incremental debt period to third platform has investment income risk deleveraging

end the million full has the a to end, X.Xx debentures portion the at quarter facility repaid the of of debt-to-equity subsequent in second ratio we Accordingly, the million XXXX. debt. Following repayment during successfully second outstanding during decreased announced then our long-term the end refinanced of the quarter X.Xx the $XX On quarter, third of quarter. $XX as the XXXX to SBA quarter also of senior our of our we credit on October issued we discussed notes million from principal grade Furthermore, platform KeyBank which unsecured X.XX% Partners an BC offering used from leverage due X% $XX notes Longer aggregate AUM Egan-Jones. to investment be proceeds Company of month. the $XX next the received to which base be and XX, of to this of in plans rating drive The due efficiencies. million completed XXXX, repay will entire we've operating the will BBB- XXXX, term, XXXX, that early

a we stabilized reduced across a base able stable asset and as to level grow we have be operating far, seek to continue portfolio. trend expenses, investment expect this So of larger of the we and will we spreading expenses

dividend Investment momentum in our key overall sustainable solid continuing a this that, the Patrick over and stable, our objective far. I practically made Chief forward to will earlier, to thus look coming is quarters. updates Schafer, mentioned We additional to Officer. soon as as We With reinstate turn progress the I providing As call possible.

Patrick Schafer

more for Ted. end. provide summarize then on quarter and third detail activities subsequent activities briefly some investment quarter to the Thanks I'll

million the $XX.X investment for approximately in the in net commitments had sales and which was approximately end. quarter, of $XX.X quarter made to The million new $XX.X the of repayments Company million of new companies, and as funded $XX.X portfolio six sales, During net million quarter. approximately repayments Company of resulting

fair consists Company's value company's of companies portfolio of portfolio, fair As value consisted a which XX X.X%. our total in the a XXXX, of portfolio, of the September of debt The million. XX, approximately investment approximately $XXX.X investments yield represented portfolio of with -- portfolio had XX.X% investment

end, investments aggregate nonaccrual As value $XX.X investment the we respectively. with aggregate of an represented status cost had companies million an and X.X% debt portfolio $X.X of million, on of in of amortized fair and quarter three XX.X% which portfolio,

Soup on Bridge million unrealized recognized exit depreciation, the by Corporate detail which now to quarter. Ridge's million $X Fire $X.X the the $X.X successful Direct. commitments Soul of quarter end. the million approximately investments, Visions, Rapid driven in on To-date, on during million, of our Protection, $X.X also depreciation driven investment more equity positions Sitel we have exited was by largely Solutions, the new of Navis The and $XX.X I'll was approximately little for Holdings. and our Company During of our of interest quarter, million $XX activity investment realized we Logan proceeds gains a million Navis of three from in of in subsequent our Chicken Holdings, recognized investments to-date. in generating investment AmeriMark by exited the provide offset Inc., Company successfully realizing This

which in equity in two close that year-end. will various have we're by of additional interest cautiously processes, currently one we stages are optimistic companies of sale Additionally, portfolio

interest-earning originated the rotating we portfolio the BC our to investments proceeds initiative positions progress be at senior the objectives on Partners, redeploying secured high-quality, out length, Jason. As over and have of we into now I'll debt and discussed immediate to turn successfully made by non-income-producing this substantial continue already. call

Jason Roos

Patrick. Thanks,

for income Total quarter. our Turning $XXX,XXX declined $X million the financial lower investment for XXXX XXXX. results by for was investments. of of to the to third Interest quarter-to-quarter second the due debt quarter outstanding quarter $X.X compared to average income million

in per in were lower quarter general $XXX.X $X.XX primarily dividend the for lower quarter to $XXX,XXX financing of onetime $XX.XX XXXX third other Accordingly, for fees for to share share -- quarter. gains Interest from of investment due and XXXX. XXXX XX, was $X.X benefit the Total were fees and Net investment net million million the in and a compared costs $X.X income the share net losses decrease net per $X to June administrative administrative by $XX.XX in income received second June third did loss of was from operations for in in or approximately to change net share per recognized XXXX. for compared the $X.X increased XX, unrealized by The second primarily at million share quarter realized fees XX, portfolio, third compared of quarter per in or and third assets XXXX. expenses or decreased million assets or by driven net driven second $XXX.X prior expenses the and nonrecurring of expenses and million $XXX,XXX, share $X.X quarter was quarter decrease ended to $XXX,XXX, the The or quarter decrease financing $X.XX $X.X quarter-to-quarter $X.XX $XX,XXX income. million NAV costs compared losses. quarter in by general unrealized of and quarter. quarter. in the per million $XXX,XXX in September million Additionally, decreased not $XXX,XXX a or of as a The as million of the the management net by primarily prior resulting net was during the XXXX. XXXX change offset to the decrease per management $X.X lower We $X.XX share of during higher partially expenses by compared smaller result per the

equivalents. XXXX, XX, cash we of As $XX.X September million cash in and had

end the outstanding, million the approximately sheet, during KeyBank of $XX.X X.Xx XXXX. the June prior million quarter. XXXX on convertible total On At X.Xx facility of was year-end. Xx balance and at to the of and million $XXX X.XX% XX due the million notes of end, we repaid had the we due quarter debt-to-equity liability at Company's credit The compared $XX.X outstanding side quarter debt of third comprised X% fully $XX ratio notes at

October in proceeds to due to notes notes rated million $XX the from BBB- noted, X.XX% senior were redeem XX, used of of this X% be quarter offering will a XXXX. placement, XXXX private outstanding unsecured issued of Egan-Jones. on Ted subsequent As which we $XX.X $XX The XXXX, million by end, the due million

XXXX I $XX.X X% over back this to will due December completed expect Goldthorpe. X, of XXXX. turn million remain that, With be the notes call outstanding. will the to And Ted that, We redemption following on

Ted Goldthorpe

We've capitalization we've in improving deleveraging headway of and in management material assuming We've are any the significant the cost. more on Thank our progress quarter. prudently since quarters proceeds high-quality portfolio, continue composition the We the last recently, remarks. this Company over we refinancing redeploying forward of of into you, for at you support made providing I Jason. the quickly as closing, of will updates also we a coming the Thank lower the questions. In progress. by and significant now reduced investment portion your operator the prepared debt equity for capital made Company more debt make to turn look investments. our to the to and call concludes long-term

Operator

And first, Thalmann. [Operator Ladenburg Instructions] Christopher Nolan we have with

Christopher Nolan

Jason, expenses, again, those would the what in for $XXX,XXX onetime please?

Jason Roos

Yes, and then, couple registration quarter. put audit shelf things. there offering those prepaid accruals sure. related on associated some as And There to prior we known or some that were this capitalized expenses. additional as A ATM expired wrote those program, of audit, an program. fees off We equity an was with programs a

Christopher Nolan

really of can making the you of mostly What sheet cost so of then the been I time terms terms XX% -- get and forth. repositioning say, or mean, in fair let's to less book is progress total you Okay. you can portfolio -- guess And in frame balance value? good have just and equity, or think your I the you guys

Ted Goldthorpe

make I pretty early mean quarter. between expect and headway now we to first the material

expect our pretty sales the remarks, his a the that have as advanced got next portfolio to We've prepared down. of are of Patrick by time of be So we'd two mentioned stages in in we call, two percentage -- our process. positions equity equity

lot a going those I'm not not saying to work of but we're happen, again, happen it's get or So down. doing to

realistic end probably is year. In I terms to we're again, think next to accelerate of that abilities. a But the trying to target our best getting XX%, of of

Christopher Nolan

question final notes. guess I on plan then those? And Great. convertible Any refinancing the to Okay.

Jason Roos

facility, holistically suit. balance Yes, -- follow it, including right right we're the would and right we're of that credit restructuring side asset-backed at now, at the some on, notes. looking convertible now sheet say I That's facility, call our the looking will

Ted Goldthorpe

Yes.

will just we tender X the right, our converts. put So a just out partial for bonds, converts close which their December given are and non-call

in mature address to time more although of bonds, May they're to -- little extinguish. because as a those have we just not XXXX, So they the unlike easily

Christopher Nolan

I've call, doing have noted your you job. was on Well, roughly trading last And of I stock a NAV. XX% the guys yeoman's mean, been

Now it's XX%. closer to

starting the So you're show changes to think the I are definitely in that making stock valuation.

you. for good So,

that's it Okay me. for

Ted Goldthorpe

Chris. Great. Thank you,

Operator

Thank this time. you. And no questions now management. to are turn I the call back there the at will over

Ted Goldthorpe

for all calls very management you thank you for support. per for thank you much. Well, always, at in dialing And morning, Great. Thank time. this your as available team is any the continued and

Operator

you. today's Thank you all This Thank concludes call. for conference participating.

You disconnect. may now

Logan Ridge Finance (LRFC) 11 Nov 212021 Q3 Earnings call transcript