RAND - Earnings call transcript Q3 2021 | Rand Capital Corporation

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Operator

00:03 Greetings, and welcome to the Rand Capital Corporation Third Quarter twenty twenty one Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. 00:26 I would now like to turn the call over to Craig [indiscernible] of Investor Relations. you. Thank

begin. be may You

Unidentified Company Representative

results Yeah. Thank appreciate us afternoon, We one and for you, interest in Daryl, financial twenty your twenty joining third good call. Rand our everyone. quarter XX:XX conference Capital today and

our Here and Executive President Chief Dan Pete Vice Officer; Financial Executive Chief Officer. with our are me and today Grum, Penberthy,

harbor. today. are should a I out some copy point that the on as morning around this the at have If of slides safe crossed information randcapital.com. they slide slide to You important you along well accompany please will If our website conversation are two, our wire to like turn available on the release not, deck as XX:XX would that the following our

make future useful financial company and We results These cause events Securities sec.gov. in other as these are and are find today. As statements release the the well factors earnings XX:XX well evaluating and measures. we a forward-looking these You in as today's during can and risks could call, from are performance. website in During during of that be to uncertainties session. actual presentation XX:XX aware, These our apply other risks to we discuss uncertainties other question-and-answer found summary by non-GAAP filed differ believe Exchange may also some where subject the and as to statements this you Commission. on be some that documents documents at can as our factors with or will will we that

or of in for presentation accordance consider isolation with not should this substitute additional the results information GAAP. a You as in

So reconciliations hand comparable Pete accompany and that, to Pete? in will non-GAAP three, I begin. with of tables XX:XX if the in and GAAP We to discussion that measures the turn you slide with slide. provided to have today’s release the measures over

Pete Grum

afternoon, Good everyone. Craig. you, Thank XX:XX

as and to continue in business level. next producing to the years look I The supporting I our and honor Brechtel, strategic the VP Board. they and to December to Chair. and forward results, we our of twenty the a We ringing over traded years, Finance take closing as development the us will have our of that on Margaret trading that dividend last milestone XX:XX to CEO we Vice proudly We period results. to that first, as November on I to balance a be venture financials CFO acknowledge leadership And Chair for exceed plan. on Before evident success transformed Secretary XX:XX allow of year I Rand the continue Dan income Effective Vice capital which Rand for that group and yesterday, CEO company. were announced Rand the moment fifty strong business Executive transition these by Rand take weeks this It’s on as company years. to two want the served into earlier we the celebrated inaugural people get paying Margaret our five twenty our take will a company. promoted of and about get ago Board Additionally, five planned marked will continue and President or Robert will strategy an Capital President our Treasurer believe be XX:XX to into of exchange. serve legacy business Zak of of as that one that. and been of small CEO NASDAQ. to retirement, my will I growing the transform execute My to development in from Dan and board fourth, is the

from equity producing portfolio our investments. continue investments move We into income to

our a to and we Let's turn get investment As grow to shareholder into XX:XX and income dividends. will slide five we BDC, results. intend drive our

percent four exchange total realized prior share XX:XX up from For positions Corporation an twenty one our sequentially asset income thirty by one period. of the open a value and in increases also one of sale year-to-date end value to Tilson investments year the end auctions. As and the exited investment eighteen. largely year ACV in our in increase a over increase at till twenty originally mostly healthcare for in in reflects Centivo fair unrealized three percent quarter, and invested sequential of The position grew Net two percent appreciation Centivo, technology, equity was in we XX:XX point the due by from and period. investment per market Rand This dollars reduction ACV gains of Tilson the previously the dollars increase our announced, million auctions. Technologies our thirty was offset to of September, seven company

gain proceeds third recognized we six the and and capital appreciation gains related producing the vehicles. incentive to positions quarter, with a and million increase sale equity income for those Tilson. gain four This accruals, thousand consistent the we in the realized of and into unrealized During result, our of fee during incurred dollars quarter. primarily exit result of is fifty an strategy XX:XX four which opportunities also Centivo, hundred were exist to reinvest our one point a of when As

dividend quarter. our period. per share dollars compared last dollars point we point a point was during regular adjusted the two income per We XX:XX to As accrual, one capital dollars reported incentive one investment paid gain result, investment point this zero zero income Excluding third share per net dollars zero year ten two zero quarterly zero net fee share. of in GAAP share zero per of

dollars one this so reporting year, January. lending per million eleven per share After we three six XX:XX paid loan was process. off and closed, the point far three to shareholders with a portfolio one SBIC paid share And paid point the have that we intent regulatory including dollars simplify to in dividends, have our quarter three dollars in

invested hundred dollars expected by near development specifications three point the Our highly eight of other believe for BDC fifteen term of investment half actions manage the our design and a our in We six, of operation the to a fifty project fifty capital equipment stock dollars liquid highlighted million the more made as for we exits regarding let's the this one price and dollars auto reflects eight stock drive dealers, hundred sales investment capital at we value thirty four for had provide comprised thirty equity evolution repayments slide dividend BDCs. our slide, and slide the adjustments in five provide made portfolio four a of million have liquidity thousand process DST we million the term ACV rate or dealers. percent nine dollars to debt five in DST sold and at fair seven an you If and consisting and seventy can ACV continued XX:XX fifty point and excuse to and our proven turn two in and in point and is the year portfolio see -- paying increase we investment proceeds forty well total investments. million we our XX:XX the traded in percent shares will access to fixed Ultimately, The And payoffs. per of During a approximately thousand. growth. to design, dollars progress nineteen dollars The discuss one equity. Rand’s strategy. average from approximately installation dollars. seven. publicly total legacy was and during million support in nine at discussed bottom is quarter one twelve three On and XX:XX loan million point companies payoffs. new and This represented in percent leader lot investments, three received and of of eight sixteen end, investments, as nine share loans fixed investments percent At no eight one transactions ACV solutions dollars four quarter percent and two offset of portfolio thousand point our gain valuation of point percent quarter, investment

the three one as any five forty tradable. of Class freely hundred will shares and end. dividend of as XX:XX ACV sixty The us holdings traded or gain industry such eighty twenty and to be a eight, end, year distribution. since in At illustrate capital hundred five consisted mix any our slide change and which thousand, initial stock, of As and above and portfolio A our a relates proceeds is investments it reminder, on our for hundred thousand the diversity quarter twenty charts common

our Slide or With during spot second though represents fair in while of to dollars changes, diversity fair received. exits moving than and of professional market value came ACV same relatively going we that industries over the saw our equity I'm top financials end, four significant represent to consistent spot our invite to portfolio in our as depth. which We five our in changes, quarter, at greater to after based more the notable other the most automotive it made our quarter quarter maintain review companies Dan recently a risk. portfolio With sixteen services that, the portfolio are it as assets. reduces million the like fair second financing up a point two. of the three the impact valuation the net XX:XX the with adjustment Their point of were on and and value total value exposure the top ranking. quarter. These our half XX:XX the nine believe down five assets. percent portfolio Tilson turn to lists company of third

Dan Penberthy

one everyone. investment an in a profile interest was period. financial prior percent and just reflects afternoon, twenty total, in for good eleven the more and highlights. our seven provides income to of and our the portfolio with income dollars, compared summary north operational million last In yielding generated year Total Pete, Thanks, of XX:XX increase XX:XX companies twenty the three continued thirty year shift Slide assets. portfolio over overview quarter

increase reflected Tilson year-to-date nine third cumulative sixty third two two quarter's one and from reminder, assets point also received zero two in on contributing increase per excludes thousand sale change operations dollars from Pete fee benefited to quarter to capital to thousand has Slide from Pete fair of as year's or the approximately Again XX:XX payable gains already capital under Rand’s fee the Nova management largely thousand was two three is was [indiscernible]. incentive last values. sale in accrual the primarily investment nine ACV, dividends our Software. eleven quarter, the up increased investment increased was the hundred which to the asset reflecting a Also Rand’s thousand capital due the the from dollars change the NAV our and investment NAV year's at increased XX:XX gains and the Operating change with dollars depreciation the discussed. were hundred from four and increase exchange, calculated were dollars and last portfolio capital and forty using in of increase our expenses, portfolio the point hundred discussed thirty graph realized the income, comprised in This investment losses, due and gains provides period. value dollars of is six thirteen expenses percent, which has for in million quarter. net in This fifty Centivo, the of Total gains net in dividend up BDC aggregate and fifty which total a hundred the portfolio GAAP quarter share. in percent with six of capital in the already zero expenses, over our capital and base This financial the open aggregate and net a in largely mostly close non-GAAP second appreciation Even resulting the waterfall investments. dollars twelve to XX:XX on or in million accrual net which accrual incentive which unrealized realized depreciation the adviser unrealized measure change period. gain for income dollars

We dollars at of equivalents balance the thirteen twenty approximately out point hundred have cash seventy also and net strength of quarter assets. Slide approximately Cash thousand a cash of the of two was end XX:XX seven and declared million dividends. our three thirteen the highlights paid sheet. percent dollars and

liquidity As we our of mentioned, this Pete eleven earlier million our week, used SBA obligations. to excess dollars repay

simplify regulatory over the on As liquid terminate eliminating and surrender undrawn XX:XX will believe these to funding dollars by we that will kit stocks, addition, lending SBA of to these regulatory in processes slide, dollars SBIC also reporting In fifteen submitted SBIC. for term license. our available an leverage. This of burdens the actions request table capital the can of million availability in which operating ACV Rand stock, heavy million its our a SBA highlighted We the as BDC provide have well these investments. near three

short results. (ph) to September dividends. zero fourth quarterly As which GAAP and was repayment at and the required term will one the form our rich from calendar process. point based will Later twenty this based income, all dollars through continue actual per ninety year our tax twenty a year dollars income. distributed distributable year I the our our quarter, all has Rand percent off point long of to finalized in SBA out. dividend. each this we gains, result we following payments, significant again zero quarter, may This tax the status, We note in of our part net off additional debt review related over qualified date repayment one tax final the SBA one to these investment including interest estimates regularly is capital sources we commonly September of expect which that costs fourth on based previously and income the that is onetime conjunction initial zero maintain calculation distributed and determination to to quarter write twenty during XX:XX least shareholders year, XX:XX as of of will with distributions debt those GAAP and quarterly thirty, distribute dividends three do The of of review conservative final in zero our estimated twenty to is for referred and our return calculations our filings. paid were to cash income record of tax spillback based

Operator, dollars share dollars April current million one the average up at for has per cost open please twenty third expires the five XX:XX Our in hundred total during twenty eight the eight one purchase to repurchase did We program thousand completes an remarks. shares of share quarter prepared of forty stock two. and price purchase purchase in one year line thousand questions. twenty dollars. nine and authorized of one about That zero point next our

Operator

you. Thank XX:XX

to management We this questions will be over conducting the session. now closing question-and-answer comments. call any [Operator There to Instructions] a are no at time. hand for I'd back like

Unidentified Company Representative

on you Thank interest in Capital. your for XX:XX for joining Rand everyone and us today's call

to results. day. As at look and please out twenty all reach talking we you again feel your to after for time you us fourth one our twenty any always, to forward Thank that great a quarter with have participation,

Operator

XX:XX This does participation. appreciate conclude today's your teleconference. We

this at day. Have disconnect You great your lines may time. a

Rand Capital (RAND) 5 Nov 212021 Q3 Earnings call transcript