8-K
false000138341400013834142023-02-082023-02-08

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 10, 2023

PennantPark Investment Corporation

(Exact name of registrant as specified in its charter)

 

Maryland

(State or Other Jurisdiction of Incorporation)

814-00736

(Commission File Number)

20-8250744

(IRS Employer Identification Number)

 

1691 Michigan Avenue,

Miami Beach, Florida

(Address of Principal Executive Offices)

33139

(Zip Code)

 

(786) 297-9500

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

PNNT

The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

28435281.2.BUSINESS


Item 2.02. Results of Operations and Financial Condition

On May 10, 2023, PennantPark Investment Corporation (the "Company") issued a press release announcing its financial results for the second quarter ended March 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report pursuant to Item 2.02 on Form 8-K and Regulation FD. A copy of the Company's schedule of investments as of March 31, 2023 and September 30, 2022 is furnished as Exhibit 99.2 to this report pursuant to Item 2.02 on Form 8-K and Regulation FD.

The information in this report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of such section. The information in this report on Form 8-K shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Act, or under the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Forward-Looking Statements

This report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports PennantPark Investment Corporation files under the Exchange Act. All statements other than statements of historical facts included in this report on Form 8-K, including Exhibits 99.1 and 99.2, are forward-looking statements and are not guarantees of future performance or results, and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission as well as changes in the economy and risks associated with possible disruption in the Company’s operations or the economy generally due to terrorism, natural disasters or pandemics such as COVID-19. PennantPark Investment Corporation undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

PennantPark Investment Corporation may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from its historical experience and present expectations.

Item 9.01. Financial Statements and Exhibits

(a) Financial statements:

None

(b) Pro forma financial information:

None

(c) Shell company transactions:

None

(d) Exhibits

 

99.1

Press Release of PennantPark Investment Corporation dated May 10, 2023

99.2

Schedule of Investments as of March 31, 2023 and September 30, 2022

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

28435281.2.BUSINESS


SIGNATURE

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: May 10, 2023

PENNANTPARK INVESTMENT CORPORATION

 

 

 

 

By:

/s/ Richard T. Allorto, Jr.

 

 

Richard T. Allorto, Jr.

 

 

Chief Financial Officer & Treasurer

 

28435281.2.BUSINESS


EX-99

EXHIBIT 99.1

https://cdn.kscope.io/06ab9a0b060df103b4f2d68c6ecb60ec-img10714785_0.jpg 

 

PennantPark Investment Corporation Announces 8.1% Increase of Its Quarterly Distribution to $0.20 per Share and Financial Results for the Quarter Ended March 31, 2023

 

Miami, FL — (GLOBE NEWSWIRE May 10, 2023) — PennantPark Investment Corporation (NYSE: PNNT) announced today its financial results for the second quarter ended March 31, 2023.

 

HIGHLIGHTS

Quarter ended March 31, 2023 (unaudited)

($ in millions, except per share amounts)

Assets and Liabilities:

 

 

 

Investment portfolio (1)

 

$

1,132.5

 

Net assets

 

$

495.7

 

GAAP net asset value per share

 

$

7.60

 

Quarterly decrease in GAAP net asset value per share

 

 

(1.4

)%

Adjusted net asset value per share (2)

 

$

7.44

 

Quarterly decrease in adjusted net asset value per share (2)

 

 

(2.1

)%

 

 

 

 

Credit Facility

 

$

362.3

 

2026 Notes

 

$

147.2

 

2026-2 Notes

 

$

161.8

 

Regulatory Debt to Equity

 

1.43x

 

Weighted average yield on debt investments at quarter-end

 

 

12.1

%

 

 

 

 

Operating Results:

 

 

 

Net investment income

 

$

16.6

 

Net investment income per share

 

$

0.26

 

Non-core income per share

 

$

(0.05

)

Core net investment income per share (3)

 

$

0.21

 

Distributions declared per share

 

$

0.185

 

 

 

 

 

Portfolio Activity:

 

 

 

Purchases of investments

 

$

58.3

 

Sales and repayments of investments

 

$

114.2

 

 

 

 

 

PSLF Portfolio data:

 

 

 

PSLF investment portfolio

 

$

747.6

 

Purchases of investments

 

$

38.5

 

Sales and repayments of investments

 

$

24.9

 

 

1.
Includes investments in PennantPark Senior Loan Fund, LLC, or PSLF, an unconsolidated joint venture, totaling $148.7 million, at fair value.
2.
This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance excluding the impact of $10.2 million, or $0.16 per share, unrealized gain on our multi-currency, senior secured revolving credit facility with Truist Bank, as amended, the “Credit Facility." The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
3.
Core net investment income ("Core NII") is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding one-time or non-recurring investment income and expenses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the quarter ended March 31, 2023, Core NII excluded; i) $3.1 million of accelerated amortization income associated with the early repayment of one of our loans; ii) a non-recurring dividend of $0.6 million from PennantPark-TSO Senior Loan Fund II, LP; and iii) and an addback of $0.6 million of incentive fee expense.

 

CONFERENCE CALL AT 12:00 P.M. EST ON MAY 11, 2023

 

PennantPark Investment Corporation (“we,” “our,” “us” or the “Company”) will also host a conference call at 12:00 p.m. (Eastern Time) on Thursday, May 11, 2023 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (888) 256-1007 approximately 5-10 minutes prior to the call. International callers should dial (929) 477-0448. All callers should reference conference ID #7357887 or PennantPark Investment Corporation. An archived replay will also be available on a webcast link located on the Quarterly Earnings page Investor section of PennantPark’s website.

 

 


 

INCREASE OF QUARTERLY DISTRIBUTION TO $0.20 PER SHARE

On May 9, 2023, the Company declared a distribution of $0.20 per share, an increase of 8.1% from the most recent distribution. The distribution is payable on July 3, 2023 to stockholders of record as of June 15, 2023 and is expected to be paid from taxable net investment income. The final tax characteristics of the distribution will be reported to stockholders on Form 1099 after the end of the calendar year and in the Company’s periodic report filed with the Securities and Exchange Commission.

 

“We are pleased to announce another increase in our quarterly dividend, which is well covered by our net investment income,” said Arthur Penn, Chairman and CEO. “We are positioned to capture this excellent vintage of investments, which we believe will continue to enhance our earnings over time.”

 

PORTFOLIO AND INVESTMENT ACTIVITY

 

PennantPark Investment Corporation

 

As of March 31, 2023, our portfolio totaled $1,132.5 million, which consisted of $648.4 million of first lien secured debt, $111.3 million of second lien secured debt, $147.9 million of subordinated debt (including $95.4 million in PSLF) and $224.9 million of preferred and common equity (including $53.4 million in PSLF). Our debt portfolio consisted of 96% variable-rate investments and 4% fixed-rate investments. As of March 31, 2023, we had one portfolio company on non-accrual, representing 1.0% and zero of our overall portfolio on a cost and fair value basis, respectively. As of March 31, 2023, the portfolio had net unrealized depreciation of $32.1 million. Our overall portfolio consisted of 135 companies with an average investment size of $8.4 million, and a weighted average yield on interest bearing debt investments of 12.1%.

 

As of September 30, 2022, our portfolio totaled $1,226.3 million and consisted of $631.0 million of first lien secured debt, $129.9 million of second lien secured debt, $141.3 million of subordinated debt (including $88.0 million in PSLF) and $324.1 million of preferred and common equity (including $51.1 million in PSLF). Our interest bearing debt portfolio consisted of 96% variable-rate investments and 4% fixed-rate investments. As of September 30, 2022, we had one portfolio company on non-accrual, representing 1% and zero percent of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2022, the portfolio had net unrealized depreciation of $71.0 million. Our overall portfolio consisted of 123 companies with an average investment size of $10.1 million, and a weighted average yield on interest bearing debt investments of 10.8 %.

 

For the three months ended March 31, 2023, we invested $58.3 million in six new and 34 existing portfolio companies with a weighted average yield on debt investments of 11.8%. For the three months ended March 31, 2023, sales and repayments of investments totaled $106.2 million. For the six months ended March 31, 2023, we invested $144.5 million in 12 new and 64 existing portfolio companies with a weighted average yield on debt investments of 11.5%. For the six months ended March 31, 2023, sales and repayment totaled $144.8 million.

For the three months ended March 31, 2022, we invested $178.0 million in eight new and 29 existing portfolio companies with a weighted average yield on debt investments of 7.2%. Sales and repayments of investments for the three months ended March 31, 2022 totaled $405.5 million. For the six months ended March 31, 2022, we invested $473.1 million in 24 new and 59 existing portfolio companies with a weighted average yield on debt investments of 7.8%. Sales and repayment of investments for the six months ended March 31, 2022 totaled $537.7 million.

 

PennantPark Senior Loan Fund, LLC

 

As of March 31, 2023, PSLF’s portfolio totaled $747.6 million, consisted of 86 companies with an average investment size of $8.7 million and had a weighted average yield on debt investments of 11.3%.

As of September 30, 2022, PSLF’s portfolio totaled $730.1 million, consisted of 80 companies with an average investment size of $9.1 million and had a weighted average yield on debt investments of 9.4%.

For the three months ended March 31, 2023, PSLF invested $38.5 million (of which $18.4 were purchased from the Company) in one new and one existing portfolio company with a weighted average yield on debt investments of 11.6%. PSLF’s sales and repayments of investments for the same period totaled $24.9 million. For the six months ended March 31, 2023, PSLF invested $55.3 million (of which $18.4 million was purchased from the Company) in eight new and five existing portfolio companies with a weighted average yield on debt investments of 11.5%. PSLF's sales and repayments of investments for the same period totaled $33.9 million.

For the three months ended March 31, 2022, PSLF invested $27.4 million (of which $11.5 million was purchased from the Company) in six new and two existing portfolio companies with a weighted average yield on debt investments of 7.5%. PSLF’s sales and repayments of investments for the same period totaled $2.3 million. For the six months ended March 31, 2022, PSLF invested $78.1 million (of which $59.6 million was purchased from the Company) in 15 new and two existing portfolio companies with a weighted average yield on debt investment of 7.5%. PSLF's sales and repayments of investments for the same period totaled $37.9 million.


 

RESULTS OF OPERATIONS

 

Set forth below are the results of operations during the three and six months ended March 31, 2023 and 2022.

 

Investment Income

 

For the three and six months ended March 31, 2023, investment income was $36.3 million and $66.3 million, respectively, which was attributable to $26.8 million and $48.6 million from first lien secured debt, $3.7 million and $7.4 million from second lien secured debt, $2.2 million and $1.1 million from subordinated debt and $4.8 million from preferred and common equity, respectively. For the three and six months ended March 31, 2022, investment income was $24.3 million and $52.7 million, respectively, which was attributable to $14.5 million and $34.6 million from first lien secured debt, $6.3 million and $10.8 million from second lien secured debt, $0.4 million and $2.3 million from subordinated debt and $3.1 million and $4.9 million from preferred and common equity, respectively. The increase in investment income was primarily due to the increase in the cost yield of our debt portfolio compared to the same periods in the prior year.

 

Expenses

 

For the three and six months ended March 31, 2023, expenses totaled $19.7 million and $39.3 million, respectively and were comprised of; $10.6 million and $20.3 million of debt related interest and expenses, $4.0 million and $8.6 million of base management fees, $3.5 million and $5.7 million of incentive fees, $1.1 million and $2.2 million of general and administrative expenses and $0.5 million and $2.5 million of provision for excise taxes. For the three and six months ended March 31, 2022, expenses totaled $12.7 million and $28.5 million, respectively, and were comprised of; $6.5 million and $13.4 million of debt related interest and expenses, $5.0 million and $10.1 million of base management fees, zero, and $2.7 million of incentive fees, $1.0 million and $1.9 million of general and administrative expenses and $0.2 million and $0.4 million of provision for excise taxes, respectively. The increase in expenses was primarily due to the increase in financing costs of our liabilities debt compared to the same periods in the prior year.

Net Investment Income

 

For the three and six months ended March 31, 2023, net investment income totaled $16.6 million, and $27.0 million, , or $0.26 and $0.41 per share, respectively. For the three and six months ended March 31, 2022, net investment income totaled $11.7 million, or $0.18 per share, and $24.2 million and $0.36 per share. The increase in net investment income was primarily due to an increase in investment income partially offset by an increase in expenses compared to the same periods in the prior year.

 

Net Realized Gains or Losses

 

For the three and six months ended March 31, 2023, net realized gains (losses) totaled $(148.7) million and $(144.7) million, respectively. For the three and six months ended March 31, 2022 net realized gains (losses) totaled $136.6 million and $108.9 million, respectively. The change in net realized gains or losses was primarily due to changes in the market conditions of our investments and the values at which they were realized compared to the same periods in the prior year.

Unrealized Appreciation or Depreciation on Investments and Debt

 

For the three and six months ended March 31, 2023, we reported net change in unrealized appreciation (depreciation) on investments of $135.4 million and $43.8 million, respectively. For the three and six months ended March 31, 2022, we reported net change in unrealized appreciation (depreciation) on investments of $(151.5) million and $(104.7) million, respectively. As of March 31, 2023 and September 30, 2022, our net unrealized appreciation (depreciation) on investments totaled $(32.1) million and $(75.7) million, respectively. The net change in unrealized appreciation or depreciation on investments compared to the same period in the prior year was primarily due to the operating performance of the portfolio companies within the portfolio and changes in the capital market conditions of our investments.

For the three and six months ended March 31, 2023, our credit facility with Truist (the "Credit Facility") had a net change in unrealized (appreciation) depreciation of $1.5 million and $5.9 million, respectively. For the three and six months ended March 31, 2022, the Credit Facility had a net change in unrealized (appreciation) depreciation of $1.3 million and $0.3 million, respectively. As of March 31, 2023 and September 30, 2022, the net unrealized (appreciation) depreciation on the Credit Facility totaled $15.2 million and $9.2 million, respectively. The net change in unrealized appreciation or depreciation compared to the same periods in the prior year was primarily due to changes in the capital markets.

 

 


Net Increase (Decrease) in Net Assets Resulting from Operations

 

For the three and six months ended March 31, 2023, the net increase (decrease) in net assets resulting from operations totaled $4.9 million, and $(67.0) million, or $0.07 per share, and $(1.03) per share, respectively. For the three and six months ended March 31, 2022, the net increase (decrease) in net assets resulting from operations totaled $3.2 million and $28.7 million, or $0.05 and $0.43 per share, respectively. The increase or decrease in the net assets resulting from the operations compared to the same periods in the prior year was primarily due to an increase in realized loss.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our liquidity and capital resources are derived primarily from cash flows from operations, including income earned, proceeds from investment sales and repayments and proceeds of securities offerings and debt financings. Our primary use of funds from operations includes investments in portfolio companies and payments of interest expense, fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives and operations.

 

As of March 31, 2023 and September 30, 2022, we had $377.4 million and $385.9 million, in outstanding borrowings under the Credit Facility, respectively and the weighted average interest rate of 7.1% and 5.3%, respectively. As of March 31, 2023 and September 30, 2022, we had $122.6 million and $114.1 million of unused borrowing capacity under the Credit Facility, respectively, subject to leverage and borrowing base restrictions.

As of March 31, 2023 and September 30, 2022, we had cash and cash equivalents of $63.1 million and $52.7 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to allows us to effectively operate our business.

 

For the six months ended March 31, 2023, our operating activities provided cash of $59.3 million and our financing activities used cash of $49.0 million. Our operating activities used cash primarily to fund our investment activities and our financing activities used cash primarily to fund repayments under the Credit Facility and SBA debentures.

For the six months ended March 31, 2022, our operating activities provided cash of $89.8 million, and our financing activities used cash of $83.9 million. Our operating activities provided cash primarily from proceeds from fund our investment activities and our financing activities used cash primarily to fund repayments under the Credit Facility.

 

SHARE REPURCHASE PROGRAM

On February 9, 2022, we announced a share repurchase program which allowed us to repurchase up to $25 million of our outstanding common stock in the open market at prices below our net asset value as reported in our then most recently published consolidated financial statements. The program expired on March 31, 2023. During the three months ended March 31, 2023, we did not make any repurchases of our common shares. During the three months ended March 31, 2022, we repurchased 913,454 shares of common stock in open market transactions for an aggregate cost (including transaction costs) of $7.1 million.

 

RECENT DEVELOPMENTS

 

On April 18, 2023, Dominion Voting Systems ("Dominion") and Fox News Network ("Fox News") agreed to settle the defamation lawsuit filed by Dominon against Fox News. As part of the settlement Fox News agreed to pay Dominion $787.5 million. Dominion is a portfolio company of PNNT, which holds a minority equity interest in the company. While Dominion may retain some of the settlement proceeds for corporate purposes, the company communicated its intention to distribute a substantial amount portion of the proceeds, net of estimated taxes and expenses, to its equity holders and PNNT's portion is estimated to be approximately $12 million. The timing and amount of any distribution is uncertain and subject to change.

 

Guy Talarico resigned as the Company's Chief Compliance Officer, effective as of the close of business on May 9, 2023. Mr. Talarico's resignation is not a result of any disagreement with the Company's operations, policies, practices or accounting matters. On May 9, 2023, the Company's Board of Directors appointed Frank Galea as Chief Compliance Officer of the Company, effective as of the close of business on May 9, 2023.

 


DISTRIBUTIONS

 

During the three and six months ended March 31, 2023, we declared distributions of $0.185 and $0.35 per share, for total distributions of $12.1 million and $22.8 million, respectively. For the three and six months ended March 31, 2022, we declared distributions of $0.14 per share, and $0.26 per share, for total distributions of $9.4 million and $17.4 million, respectively. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the SEC.

 

AVAILABLE INFORMATION

 

The Company makes available on its website its Quarterly report on Form 10-Q filed with the SEC and stockholders may find the report on our website at www.pennantpark.com.


PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(In thousands, except share data)

 

 

 

 

 

 

 

 

 

 

March 31, 2023
(Unaudited)

 

 

September 30, 2022

 

Assets

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

Non-controlled, non-affiliated investments (cost—$876,705 and $882,513 respectively)

 

$

879,572

 

 

$

932,155

 

Non-controlled, affiliated investments (cost— $54,813 and $37,612, respectively)

 

 

51,807

 

 

 

34,760

 

Controlled, affiliated investments (cost— $233,082 and $381,904, respectively)

 

 

201,132

 

 

 

259,386

 

Total of investments (cost—$1,164,600 and $1,302,029, respectively)

 

 

1,132,511

 

 

 

1,226,301

 

Cash and cash equivalents (cost—$63,105 and $52,844, respectively)

 

 

63,135

 

 

 

52,666

 

Interest receivable

 

 

4,419

 

 

 

3,593

 

Receivable for investments sold

 

 

 

 

 

29,494

 

Distributions receivable

 

 

4,834

 

 

 

2,420

 

Prepaid expenses and other assets

 

 

12,036

 

 

 

4,036

 

Total assets

 

 

1,216,935

 

 

 

1,318,510

 

Liabilities

 

 

 

 

 

 

Distributions payable

 

 

12,067

 

 

 

9,784

 

Payable for investments purchased

 

 

15,149

 

 

 

 

Credit Facility payable, at fair value (cost—$377,420 and $385,920, respectively)

 

 

362,268

 

 

 

376,687

 

2026 Notes payable, net (par—$150,000, respectively)

 

 

147,218

 

 

 

146,767

 

2026 Notes-2 payable, net (par—$165,000, respectively)

 

 

161,800

 

 

 

161,373

 

SBA Debentures payable, net (par—$20,000, respectively)

 

 

 

 

 

19,686

 

Base management fee payable

 

 

4,040

 

 

 

4,849

 

Incentive fee payable

 

 

3,530

 

 

 

 

Interest payable on debt

 

 

6,093

 

 

 

6,264

 

Accrued other expenses

 

 

9,055

 

 

 

6,639

 

Deferred tax liability

 

 

 

 

 

896

 

Total liabilities

 

 

721,220

 

 

 

732,945

 

Commitments and contingencies

 

 

 

 

 

 

Net assets

 

 

 

 

 

 

Common stock, 65,224,500 shares issued and outstanding,
   Par value $0.001 per share and 100,000,000 shares authorized

 

 

65

 

 

 

65

 

Paid-in capital in excess of par value

 

 

748,169

 

 

 

748,169

 

Accumulated deficit

 

 

(252,519

)

 

 

(162,669

)

Total net assets

 

$

495,715

 

 

$

585,565

 

Total liabilities and net assets

 

$

1,216,935

 

 

$

1,318,510

 

Net asset value per share

 

$

7.60

 

 

$

8.98

 

 


PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share data)

 

 

 

Three Months Ended
March 31,
(Unaudited)

 

 

Six Months Ended
March 31,
(Unaudited)

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

From non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

26,759

 

 

$

14,543

 

 

$

48,990

 

 

$

30,083

 

Payment-in-kind

 

 

24

 

 

 

996

 

 

 

24

 

 

 

3,406

 

Dividend Income

 

 

1,131

 

 

 

 

 

 

1,131

 

 

 

 

Other income

 

 

346

 

 

 

2,612

 

 

 

833

 

 

 

6,803

 

From non-controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

81

 

 

 

 

 

 

81

 

 

 

 

From controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

3,648

 

 

 

2,343

 

 

 

6,506

 

 

 

4,609

 

Payment-in-kind

 

 

658

 

 

 

1,425

 

 

 

1,789

 

 

 

3,551

 

Other Income

 

 

3,702

 

 

 

2,420

 

 

 

6,958

 

 

 

4,235

 

Total investment income

 

 

36,349

 

 

 

24,339

 

 

 

66,312

 

 

 

52,687

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Base management fee

 

 

4,040

 

 

 

4,981

 

 

 

8,642

 

 

 

10,090

 

Performance-based incentive fee

 

 

3,530

 

 

 

 

 

 

5,721

 

 

 

2,657

 

Interest and expenses on debt

 

 

10,587

 

 

 

6,498

 

 

 

20,316

 

 

 

13,385

 

Administrative services expenses

 

 

267

 

 

 

250

 

 

 

533

 

 

 

500

 

Other general and administrative expenses

 

 

835

 

 

 

723

 

 

 

1,676

 

 

 

1,446

 

Expenses before provision for taxes

 

 

19,259

 

 

 

12,452

 

 

 

36,888

 

 

 

28,078

 

Provision for taxes on net investment income

 

 

450

 

 

 

200

 

 

 

2,450

 

 

 

400

 

Total expenses

 

 

19,709

 

 

 

12,652

 

 

 

39,338

 

 

 

28,478

 

Net investment income

 

 

16,640

 

 

 

11,687

 

 

 

26,974

 

 

 

24,209

 

Realized and unrealized gain (loss) on investments and debt:

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) on investments and debt:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(14,613

)

 

 

1,889

 

 

 

(10,549

)

 

 

7,090

 

Non-controlled and controlled, affiliated investments

 

 

(133,098

)

 

 

140,898

 

 

 

(133,098

)

 

 

109,624

 

Debt extinguishment

 

 

(289

)

 

 

(1,132

)

 

 

(289

)

 

 

(2,801

)

Provision for taxes on realized gain on investments

 

 

(717

)

 

 

(5,060

)

 

 

(717

)

 

 

(5,060

)

Net realized gain (loss) on investments and debt

 

 

(148,717

)

 

 

136,595

 

 

 

(144,653

)

 

 

108,853

 

Net change in unrealized appreciation (depreciation) on:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

3,950

 

 

 

(158,062

)

 

 

(46,567

)

 

 

(207,665

)

Non-controlled and controlled, affiliated investments

 

 

131,459

 

 

 

6,610

 

 

 

90,411

 

 

 

102,982

 

Provision for taxes on unrealized appreciation (depreciation) on investments

 

 

 

 

 

5,045

 

 

 

896

 

 

 

 

Debt (appreciation) depreciation

 

 

1,540

 

 

 

1,285

 

 

 

5,919

 

 

 

289

 

Net change in unrealized appreciation (depreciation) on investments and debt

 

 

136,949

 

 

 

(145,122

)

 

 

50,659

 

 

 

(104,394

)

Net realized and unrealized gain (loss) from investments and debt

 

 

(11,768

)

 

 

(8,527

)

 

 

(93,994

)

 

 

4,459

 

Net increase (decrease) in net assets resulting from operations

 

 

4,872

 

 

 

3,160

 

 

$

(67,020

)

 

 

28,668

 

Net increase (decrease) in net assets resulting from operations per common share

 

$

0.07

 

 

$

0.05

 

 

$

(1.03

)

 

$

0.43

 

Net investment income per common share

 

$

0.26

 

 

$

0.18

 

 

$

0.41

 

 

$

0.36

 

 

ABOUT PENNANTPARK INVESTMENT CORPORATION

PennantPark Investment Corporation, or the Company, is a business development company that invests primarily in U.S. middle-market companies in the form of first lien secured debt, second lien secured debt, subordinated debt and equity investments. PennantPark Investment Corporation is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC is a leading middle market credit platform, managing $6.2 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, and Los Angeles.

 

 


FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports PennantPark Investment Corporation files under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the SEC. PennantPark Investment Corporation undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

We may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations.

The information contained herein is based on current tax laws, which may change in the future. The Company cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in this material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.

 

Contact:

Richard T. Allorto, Jr.

 

PennantPark Investment Corporation

 

(212) 905-1000

 

www.pennantpark.com

 


EX-99

EXHIBIT 99.2

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENT (Unaudited)

March 31, 2023

(In thousands, except share data)

Issuer Name

 

Maturity / Expiration

 

Industry

 

Current
 Coupon

 

 

Basis Point
 Spread Above
 Index
(4)

 

 

Par /
 Shares

 

 

Cost

 

 

Fair Value (3)

 

Investments in Non-Controlled, Non-Affiliated Portfolio Companies—177.4% of Net Assets (1), (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Secured Debt—118.9% of Net Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A1 Garage Merger Sub, LLC

 

12/22/2028

 

Personal, Food and Miscellaneous Services

 

 

11.12

%

 

3M L+660

 

 

 

1,705

 

 

$

1,681

 

 

$

1,680

 

A1 Garage Merger Sub, LLC - Unfunded Term Loan

 

12/21/2024

 

Personal, Food and Miscellaneous Services

 

 

 

 

 

 

 

 

5,253

 

 

 

-

 

 

 

-

 

A1 Garage Merger Sub, LLC (Revolver) (7)

 

12/22/2028

 

Personal, Food and Miscellaneous Services

 

 

 

 

 

 

 

 

2,532

 

 

 

-

 

 

 

(38

)

Ad.net Acquisition, LLC (Revolver)

 

05/07/2026

 

Media

 

 

11.16

%

 

3M L+600

 

 

 

178

 

 

 

178

 

 

 

176

 

Ad.net Acquisition, LLC (Revolver) (7)

 

05/07/2026

 

Media

 

 

 

 

 

 

 

 

267

 

 

 

-

 

 

 

(2

)

Altamira Technologies, LLC (Revolver)

 

07/24/2025

 

Aerospace and Defense

 

 

10.55

%

 

3M L+550

 

 

 

50

 

 

 

50

 

 

 

50

 

Altamira Technologies, LLC (Revolver) (7)

 

07/24/2025

 

Aerospace and Defense

 

 

 

 

 

 

 

 

138

 

 

 

 

 

 

-

 

Anteriad, LLC (f/k/a MeritDirect, LLC)

 

05/23/2024

 

Media

 

 

11.46

%

 

3M L+650

 

 

 

1,268

 

 

 

1,243

 

 

 

1,243

 

Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7)

 

05/23/2024

 

Media

 

 

 

 

 

 

 

 

1,612

 

 

 

 

 

 

(48

)

Any Hour Services

 

07/21/2027

 

Personal, Food and Miscellaneous Services

 

 

10.49

%

 

3M L+563

 

 

 

4,099

 

 

 

4,077

 

 

 

3,986

 

Any Hour Services (Revolver) (7)

 

07/21/2027

 

Personal, Food and Miscellaneous Services

 

 

 

 

 

 

 

 

1,147

 

 

 

 

 

 

(32

)

Apex Service Partners, LLC

 

07/31/2025

 

Personal, Food and Miscellaneous Services

 

 

7.60

%

 

1M L+550

 

 

 

1,331

 

 

 

1,331

 

 

 

1,324

 

Apex Service Partners, LLC Term Loan C

 

07/31/2025

 

Personal, Food and Miscellaneous Services

 

 

9.08

%

 

1M L+550

 

 

 

1,893

 

 

 

1,876

 

 

 

1,883

 

Apex Service Partners, LLC (Revolver)

 

07/31/2025

 

Personal, Food and Miscellaneous Services

 

 

10.26

%

 

3M L+525

 

 

 

466

 

 

 

466

 

 

 

464

 

Apex Service Partners, LLC (Revolver) (7)

 

07/31/2025

 

Personal, Food and Miscellaneous Services

 

 

 

 

 

 

 

 

466

 

 

 

 

 

 

(2

)

Applied Technical Services, LLC

 

12/29/2026

 

Environmental Services

 

 

10.91

%

 

3M L+575

 

 

 

2,256

 

 

 

2,234

 

 

 

2,211

 

Applied Technical Services, LLC (7)

 

04/21/2023

 

Environmental Services

 

 

 

 

 

 

 

 

735

 

 

 

 

 

 

(6

)

Applied Technical Services, LLC (Revolver)

 

12/29/2026

 

Environmental Services

 

 

12.47

%

 

3M P+475

 

 

 

825

 

 

 

825

 

 

 

809

 

Applied Technical Services, LLC (Revolver) (7)

 

12/29/2026

 

Environmental Services

 

 

 

 

 

 

 

 

175

 

 

 

 

 

 

(4

)

Arcfield Acquisition Corp. (Revolver) (7)

 

03/07/2028

 

Aerospace and Defense

 

 

 

 

 

 

 

 

2,263

 

 

 

 

 

 

(45

)

Berwick Industrial Park

 

05/02/2023

 

Buildings and Real Estate

 

 

11.00

%

 

 

 

 

 

4,000

 

 

 

4,005

 

 

 

3,936

 

Beta Plus Technologies, Inc.

 

07/01/2029

 

Business Services

 

 

9.42

%

 

SOFR+475

 

 

 

4,975

 

 

 

4,886

 

 

 

4,378

 

BioDerm, Inc.

 

01/31/2028

 

Healthcare, Education and Childcare

 

 

10.86

%

 

3M L+650

 

 

 

9,000

 

 

 

8,895

 

 

 

8,865

 

BioDerm, Inc. (Revolver) (7)

 

01/31/2028

 

Healthcare, Education and Childcare

 

 

 

 

 

 

 

 

1,071

 

 

 

 

 

 

(16

)

Blackhawk Industrial Distribution, Inc.

 

09/17/2024

 

Distribution

 

 

11.15

%

 

3M L+625

 

 

 

1,407

 

 

 

1,394

 

 

 

1,375

 

Blackhawk Industrial Distribution, Inc.(7)

 

09/17/2024

 

Distribution

 

 

 

 

 

 

 

 

3,808

 

 

 

 

 

 

(67

)

Blackhawk Industrial Distribution, Inc. (Revolver)

 

09/17/2024

 

Distribution

 

 

11.15

%

 

3M L+625

 

 

 

343

 

 

 

343

 

 

 

332

 

Blackhawk Industrial Distribution, Inc. (Revolver) (7)

 

09/17/2024

 

Distribution

 

 

 

 

 

 

 

 

3,203

 

 

 

 

 

 

(104

)

Broder Bros., Co.

 

12/04/2025

 

Consumer Products

 

 

10.73

%

 

3M L+600

 

 

 

9,967

 

 

 

9,967

 

 

 

9,967

 

Cartessa Aesthetics, LLC

 

06/14/2028

 

Distribution

 

 

10.90

%

 

1M L+600

 

 

 

34,229

 

 

 

33,618

 

 

 

33,887

 

Cartessa Aesthetics, LLC - (Revolver)

 

06/14/2028

 

Distribution

 

 

10.90

%

 

1M L+600

 

 

 

1,265

 

 

 

1,265

 

 

 

1,253

 

Cartessa Aesthetics, LLC - (Revolver) (7)

 

06/14/2028

 

Distribution

 

 

 

 

 

 

 

 

2,297

 

 

 

 

 

 

(23

)

CF512, Inc.

 

08/20/2026

 

Media

 

 

10.96

%

 

3M L+600

 

 

 

6,686

 

 

 

6,607

 

 

 

6,552

 

CF512, Inc.(Revolver) (7)

 

08/20/2026

 

Media

 

 

 

 

 

 

 

 

909

 

 

 

 

 

 

(18

)

Compex Legal Services, Inc.

 

02/09/2026

 

Business Services

 

 

10.45

%

 

3M L+555

 

 

 

849

 

 

 

840

 

 

 

849

 

Compex Legal Services, Inc. (Revolver)

 

02/07/2025

 

Business Services

 

 

10.45

%

 

3M L+555

 

 

 

393

 

 

 

393

 

 

 

393

 

Compex Legal Services, Inc. (Revolver) (7)

 

02/07/2025

 

Business Services