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Portman Ridge Finance Corporation Announces Full Year 2019 Financial Results; Board Authorizes Stock Repurchase Program

NEW YORK, March 06, 2020 (GLOBE NEWSWIRE) — Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company”) announces its full year 2019 financial results; Board authorizes Stock Repurchase ProgramRecent DevelopmentsAs previously announced, the Company successfully closed on the merger of OHA Investment Corporation (“OHAI”) on December 18, 2019.On February 5, 2020, the Board of Directors of the Company approved a cash distribution of $0.06 per share of common stock. The distribution was paid on February 28, 2020.On March 5, 2020, the Board of Directors of the Company approved a $10 million stock repurchase program.Financial HighlightsNet investment income for the year ended December 31, 2019 was approximately $3.1 million, or $0.08 per basic share, compared with net investment income of approximately $10.0 million, or $0.27 per basic share in the year ended December 31, 2018. Excluding approximately $4.8 million of expenses incurred in connection with the Externalization, net investment income was $7.9 million, or $0.21 per basic share.Net investment income for the fourth quarter of 2019 was approximately $2.1 million, or $0.06 per basic share, consistent with the prior quarter.On December 18, 2019, we completed our acquisition of OHA Investment Corporation (“OHAI”). The transaction was structured as a “NAV for NAV” merger, whereby the Company acquired approximately $34.3 million of OHAI’s net assets at closing in exchange for cash and approximately 7.4 million shares of the Company’s common stock issued at NAV.At December 31, 2019, the fair value of the Company’s investments totaled approximately $278 million.Net asset value per share as of December 31, 2019 was $3.40.Quarterly distribution paid was $0.06 per share.Ted Goldthorpe, Chief Executive Officer of Portman Ridge Finance Corporation, noted, “We are excited to have completed the merger with OHAI as we continue to seek opportunities to increase the scale of Portman Ridge and drive shareholder value. Since becoming manager in April 2019, we have successfully increased the underlying yields on the portfolio while also increasing the percentage of senior secured Debt Securities through the broad sourcing channels at BC Partners. Additionally, we have made significant progress on a similar transformation of the OHAI portfolio during the first quarter in 2020. Overall, we are pleased with our earnings quality and growth as we continue with the repositioning of the portfolio. Our stock repurchase program gives us another tool to selectively deploy capital in an accretive manner for shareholders.”Operating ResultsFor the year ended December 31, 2019, the Company reported total investment income of approximately $26.5 million as compared to approximately $27.1 million for the year ended 2018. Investment income from debt securities in the year was approximately $15.1 million, compared with approximately $16.1 million in 2018. The decline was primarily due to the decrease in LIBOR rates during the year and the ramping of investments during the first half of 2019. Investment income on CLO fund securities for the year ended December 31, 2019 and 2018 was approximately $6.4 million. Investment income from Joint Ventures in 2019 was approximately $4.9 million, an increase of approximately $1.8 million compared to 2018, due primarily to our investment in the Great Lakes joint venture which occurred late in 2018 and did not contribute meaningfully to 2018 investment income.For the quarter ended December 31, 2019, the Company reported total investment income of approximately $6.7 million as compared to approximately $6.3 million in the same period last year. Investment income from debt securities in the quarter was approximately $4.0 million, compared with approximately $3.1 million in the fourth quarter of 2018. Investment income on CLO fund securities in the quarter was approximately $1.3 million compared with approximately $1.7 million in the fourth quarter of 2018. Investment income from Joint Ventures in the fourth quarter of 2019 was approximately $1.3 million, up from approximately $1.0 million in the same period of 2018For the year ended December 31, 2019, total expenses were approximately $23.4 million, compared to approximately $17.1 million for the year ended December 31, 2018. Excluding the costs associated with the Externalization, total expenses for the year were approximately $18.6 million. Interest expense and amortization on debt issuance costs for the year ended December 31, 2019 were approximately $8.3 million, versus approximately $7.4 million for the year ended December 31, 2018.For the three months ended December 31, 2019, total expenses were approximately $4.6 million, compared to approximately $4.2 million for the three months ended December 31, 2018. Interest expense and amortization of debt issuance costs were approximately $2.2 million during the fourth quarter of 2019 compared with approximately $1.8 million in the same period last year.Portfolio and Investment ActivityThe fair value of our portfolio was approximately $278 million as of December 31, 2019. The composition of our investment portfolio at December 31, 2019 and December 31, 2018 at cost and fair value was as follows:Stockholder distributionAs previously announced, on February 5, 2020 the Board of Directors of the Company approved a cash distribution of $0.06 per share of common stock. The distribution was paid on February 28, 2020 to stockholders of record at the close of business as of February 18, 2020.The Board evaluates a number of factors in determining the amount of the yearly distribution, including the amount required to be distributed in order for the Company to maintain its status as a “regulated investment company” under the Internal Revenue Code.We have adopted a Dividend Reinvestment Plan (“DRIP”) that provides for reinvestment of our distributions on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, if we declare a cash distribution, our stockholders who have not “opted out” of our DRIP will have their cash distributions automatically reinvested in additional shares of our common stock, rather than receiving cash. Please contact your broker or other financial intermediary for more information regarding the DRIP. Distributions may include net investment income, capital gains and/or return of capital. The tax status of distributions will be determined at the end of the taxable year.Liquidity and Capital ResourcesAt December 31, 2019, we had unrestricted cash and short-term investments of approximately $4.3 million and approximately $24.4 million of asset sales awaiting settlement, total assets of approximately $310 million and stockholders’ equity of approximately $152 million. Our net asset value per common share was $3.40. As of December 31, 2019, we had approximately $157.0 million (par value) of borrowings outstanding ($153.9 million net of capitalized costs) with a weighted average interest rate of approximately 5.4%. Our asset coverage ratio stood at 195% as of December 31, 2019 but increased subsequent to quarter end as the previously noted asset sales were completed and some of the proceeds were used to pay down outstanding debt.The Board of Directors has authorized us to repurchase up to $10 million of common stock under a stock repurchase program. Under this repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise subject to any agreement to which we are party including any restrictions in the indenture for our 6.125% Notes Due 2022. The timing and actual number of shares repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This repurchase program may be suspended or discontinued at any time. Subject to these restrictions, we will selectively pursue opportunities to repurchase shares which are accretive to net asset value per share.Conference Call and WebcastWe will hold a conference call on Monday March 9, 2020 at 2:30 pm Eastern Time to discuss our full year 2019 financial results. Stockholders, prospective stockholders and analysts are welcome to listen to the call or attend the webcast.To access the call please dial (866) 757-5630 approximately 10 minutes prior to the start of the conference call. No password is required. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on our Company’s website www.portmanridge.com in the Investor Relations section under Events. The online archive of the webcast will be available after 7pm Eastern Time for approximately 90 days.
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