LRFC - Earnings call 3 2023 | Logan Ridge Finance Corporation

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Operator

Thank you for standing by, and welcome to Logan Ridge Finance Corporation's Third Quarter Ended September 30, 2023 Earnings Conference Call. An earnings press release was distributed yesterday after the close of the market. A copy of the release, along with the supplemental earnings presentation is available on the company's website at www.loganridgefinance.com in the Investor Resources section and should be reviewed in conjunction with the company's Form 10-Q filed with the SEC.

As a reminder, this conference call is being recorded for replay purposes.

Please note that today's conference call may contain forward-looking statements, which are not guarantees of future performance or results and involve a number of risks and uncertainties. with materially of in including a in company's differ as forward-looking those may the result a number filings results from the those statements described Actual SEC. the of factors,

and Executive Officer; turn call I today's Chief would With Ted of Corporation; Goldthorpe, Officer, Ridge be Speaking the Schafer, Ridge to Finance Director Chief Chief Goldthorpe, on Logan Financial will of Roos, that, to call Patrick Logan Chief over now Ted Please Officer Executive like President and ahead, go Jason Officer. Finance Investment Corporation. Ted.

Edward Goldthorpe

to quarter Good our afternoon. earnings Welcome third XXXX call.

mentioned, our our Chief by Chief joined Patrick and Officer, Roos; Schafer. Jason As Investment I'm Financial today Officer,

and opening financials. will Following remarks, Jason on provide walk Patrick our through detail the to my additional will date investment activity

to trajectory little largely over a success just reported highest income XXXX. net income continuation investment net another that once September of the Logan quarter I'd by for managing income X -- investment a This ending of Logan has first the over highlighting years quarter our the Ridge is XX, the strong on generating like again year positive ago we start X company quarter began since we since been reported performance ago.

to equity As BC can on highlights, -- Partners which and my has a key legacy limited company's remarks and and been has in credits the exposure Jason brief to to With that clear mind, I reflected Logan the prepared provide to increased. been BC will shortly. keep results. through credit Ridge's Credit benefit portfolio detail financial few more Patrick decline originated The today continued has shareholders the and its has by exposure to platform

$X.XX per approved dividend the we've We distributions result First XXXX, $X.XX our Including of strong which per net consecutive each back Directors $X.X bringing $X.XX distribution, compared performance, fifth share early per income, last we've as or million share. increased steadily in it and positive a turned quarter. to quarterly this for quarter. the is Since XX% quarter. reported it per this investment increase the of to Board amounted total to distribution, share $X.XX in of XXXX the a in declared quarterly share financial foremost, company's on quarter

power to in the Compared of $X.XX our or income $X XXXX. to or from per the investment quarter we've we million illustrates the This redeploying that up of is in by investment $XXX,XXX platform. BC proud prior same net Credit the the share. the and Compared enhanced quarter, achievement. earnings capital reworked names our the had third the in up XXXX is million in originated net quarter success year, from legacy per trend non-yielding portfolio share $X our structure the incredibly Partners of portfolio, I'm income-generating monetizing income this $X.XX driven by and prior into refinanced capital $XXX,XXX

remained and for in funding strong, with million company quarter the the follow-on new $X.X Deployment investments.

$XX.X of sales sales us net for quarter. at million and leaving repayments million, repayment elevated were $XX.X with However, the and

As of companies. investments -- of portfolio quarter of XX end, consisted consist the in XX

and during late to the Finally, in inception introduction accretive quarter the March. since cost established $X.XX Since per shares continued for per aggregate an for and shares of the that $XXX,XXX, program. program XXXX, share NAV $X.XX by XX,XXX the until the approximately was of has approximately over which repurchased is quarter, our company of share share the repurchase we program the September repurchasing through XX,

strong, quarter and expecting thus, we rebounding a the pipeline final As quarter is fourth deployment. are the solid of and our year, enter M&A for activity we is

the continue private very credit very on and vintage, attractive company's optimistic be prove to I'm to that believe We future. XXXX will

Patrick to Schafer, With that, over I Investment our the Officer. Chief will turn call

Patrick Schafer

Thanks, Ted.

portfolio of the a companies. This with exposure fair $XXX.X to value of As portfolio to approximately XX with and fair XX million Logan's of XXXX. value prior the quarter of companies as $XXX.X compares XX portfolio quarter XX, with September approximately million a portfolio the companies $XXX.X million value of XXXX, of fair as was of third

During continue capital. quarter, we third deploy to the judiciously

repayments Specifically, for the million exit and of repayments $XX.X quarter $X.X company made the follow-on was approximately the $XX.X sales in in company, a million legacy in Quest. in had for net and quarter. new and Included million Jurassic and repayments resulting of approximately approximately and our sales investments company's portfolio successful the sales

fully preferred pay large proceeds repayments off Specifically, to Ted ratio quarter, and leverage Logan invested received pipeline in across its the we quarter repayments, of we which gain to in the million and platform. large back capital half the that strong approximately to and Ridge strong, are $XXX,XXX. this Jurassic generated target a optimistic while some will loan has its during end interest the sales by realized as of any fourth of term Ridge $X.X quarter, second deployment equity had our is such that for unexpected barring our historically be is mentioned, Logan a redeploy in company Moreover, the been which Quest, able

weighted value excluding invested weighted This excluding XX% XX%, portfolio, end, was obligations. company's At yield fair BC a the Now as total at with of loan collateralized assets prior quarter. from annualized to yield nonaccruals portfolio portfolio as with value of quarter fair total of income nonaccruals represents our compares loan represented by average September which on a from investment and and investment to a approximately at composition obligations XX.X% annualized of the investment debt the debt of XX.X%, in collateralized value, portfolio originated at XX% platform. average income the approximately XXXX, our of of Partners portfolio XX, portfolio fair

of cost June value XX, XX.X% total XXXX. And as respectively, portfolio XX.X% cost and XX.X% First lien total value nonyielding fair debt total of XX, our XX.X% XX.X% June XX.X% as fair compares portfolio and of and cost value a on lien a on fair compares The equity on XX.X% XX, XX, portfolio on and of and fair basis This XX.X% a value XXXX. debt basis, and and portfolio XXXX. our basis, first September cost XX.X% of of a cost basis, on represented and represented XX.X% This portfolio the the of our respectively. September to representing portfolio as as a fair of to of respectively, basis, respectively, XXXX. and value and

to largely driven portfolio. our was in increase equity sales the portfolio in prior The debt the relative and net repayments quarter by

of at a XX.X% was interest floating of of debt XX.X% XX, As compared June to XXXX, rate value our September at XXXX. as portfolio XX, fair bearing

on no months to the to remained Moving portfolio XXXX, XX, nonaccrual there were stable quality status. X nonaccrual status. added companies as new September Credit during ended

$XX.X value, of of XX, and decrease and As respectively, $XX.X as cost million prior respectively. nonaccrual and respectively. million cost amortized X.X% quarter million, of the fair as fair X on investment respectively, XXXX, at and we and portfolio, portfolio September and on fair compared had slight value portfolio represents the X.X% This $XX.X aggregate or fair an companies companies with million, cost $XX.X cost and value, X nonaccrual investment portfolio to with representing and X.X% a of X.X% status of a value of the

I'll now turn Jason. the to call over

Jason Roos

Thanks, Patrick.

quarter XXXX. for financial results September our to XX, ended the Turning

Logan as which investment XXXX, a third $XXX,XXX generated million quarter quarter of prior decrease largely represents compared Ridge the quarter quarter. driven was increase compared the of $X.X less investment income income, quarter earning The decrease and income the the compared of For by to the discussed million an the in third of $X.X prior repayments net prior to to slight Patrick and as year. other well and during nonrecurring sales earlier the

Credit million as down same by increase a driven was to in sales received quarter financing approximately the proceeds due exiting paying proceeds the quarter expenses result $X XXXX company's interest-earning the to the million quarter. in year, of the assets Compared received lower into base XXXX, as repayments an portfolio second Total compared during prior expenses with BC $XXX,XXX the primarily nonyielding the increase facility by net for the and the to platform and of $X.X from the as in by originated credit period interest as decreased in to primarily rates. redeploying well third of operating equity portfolio from Partners the

approximately Compared by driven to financing expenses, current management the third fees higher administrative quarter and interest the $XXX,XXX, of XXXX, quarter largely were and and higher current expenses expenses by period. offset in lower in the general by partially

year. per quarter income. million of $X.X was in net the $X.XX quarter or or consecutive marking compares million net income investment of our $X share net share income the investment positive to fifth the the share, Our per This $X.XX We made investment for Logan's just note, increase $XXX,XXX quarter under period prior the year-over-year of in has prior or for significant per the and the substantial management. illustrates $X.XX company progress Mount particular believe

quarter of net to was Our September On XXXX, end as to the value or per representing value a net share as at share a compared million the X.X% net as asset compared per prior X.X% decrease the XX, share $XX.X XX, second decrease share basis, per $XX.X million, quarter of of representing value million. asset a was $XX.XX September per of XXXX, asset $XX.XX of $X.XX XXXX. or $X as

exceeding the accretive net well and a as by repurchase as net highlight asset our investment basis of effect income of the share quarter, our XXXX, decrease between decrease the asset share per unrealized share partially program. X.X% program. the decrease company's value the to asset compared the accretive on like the realized The that X.X% portfolio by I'd in August XX, net effect was net losses is quarter-over-quarter difference on offset value dividend in the per share as net value buyback in driven to during

asset net $X.XX share year net received accretive Compared effect on to the the shareholders outearning dividend per decreased and and per realized the during the or buyback the million a year, unrealized of our between company's portfolio driven decreased in and The value prior X.X% prior Again, or share share X.X% effect On of accretive million, from basis, XXXX. program. XX, losses $XX the the decrease is as a its the asset net Logan of per share relative by share by the offset from per company the was X.X% repurchase the X.X%. value value basis on by year asset $XX.XX value difference program. partially net December by asset $X.X to net

equivalents quarter investments the cash $X.X million Credit as company capacity borrowing call million and available Ted. that, With $XX.X turn end, cash in by Partners deployment originated back had of the BC and will the as well platform. for as I to Finally, unused over of

Edward Goldthorpe

Jason. you, Thank

continued Ridge's continued of XXXX, proud in up With made you Logan during call open third we've the early we updating XXXX. are look questions. progress I'll of to and the the progress that, We forward for on quarter

Operator

your [Operator Christopher Instructions] line And first from Nolan from the question of Thalmann. comes Ladenburg

Christopher Nolan

bang terms doesn't a Why for just repurchases NAV. in repurchases getting so share down? of on of your effect You're increase buck lot NAV share don't the you go

Patrick Schafer

Chris, Yes. Patrick. it's

what there of I there. are and around all company in would think is and buy of rules you and management much can kind restrictions certain back I as limitations terms say the how

shares the not of we're we market. actually, amount it's speaking, as buy just of So can what terms back necessarily in practically buying simple in increasing the as that

Edward Goldthorpe

you, So within I under. constraints mean, the just pretty with operate agreement much violent operate we we we're yes, -- that we're in

Christopher Nolan

-- increase of in the incremental quarter -- run in that we then taking decent expect for quarters, mean of this the And I you're sort be coming you dividend, is a assuming guys Understood. seem terms is an over-earning dividend, to rate? should

Patrick Schafer

dollars sometimes think would Yes. we to I I NII mean short -- that think we answer can small. the expect gap. be I be said it on as yes, still is, calls like that, the would absolute actual expecting and mentioned close this to increase, before, you mean I Having are

you we over so like expenses have impacting something coverage. gap on our that yes, But rate we want expect be that either And of or speaking, dividend make time. careful or policy kind close the issues, actual generally the to to very our fees could don't kind to of sure dividend unexpected onetime

Christopher Nolan

Degree, the in guys it, any have update Nth given uncertainty question. equity Final of that such a you you can large provide economy? position the given

Patrick Schafer

Chris. Good Yes. question,

to can I I is continues They through they did -- accretive an perform to well. is of But and a terms very company summer say what various places. hopeful we're M&A lot they're enterprise and speaking, think generally I very the transaction in this be that of the different think purchasing business public that in purchased price it. value will at the the which

very, pre-COVID period hit year, job exceptional it, So a has want generally particular company and I'd over what was last, exceeded an whatever well performance. this don't you hard of XX the know levels of time, very speaking, months, done I during say, call but COVID and has to rebounding

with So seen current is we're so generally anything pretty that would far the suggest environment haven't business. pleased and impacting the performance the

Operator

at There questions Instructions] pass the to to for are other closing this time. Ted would no [Operator call I remarks. Goldthorpe back like

Edward Goldthorpe

you, thank announce all everybody we a Thanksgiving, and forward We to wish for as or happy again to member And much. reach very any our us results. to considerations. of to Well, please and Thank full with today. you you in March free Great. management look fourth we early of any when XXXX quarter year everyone, joining speaking XXXX out feel always, questions very

Operator

rest the day. Enjoy This of your concludes conference today's call.

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Logan Ridge Finance (LRFC) 9 Nov 232023 Q3 Earnings call transcript