Results for the Quarter Ended June 30, 2023 and Other Recent Highlights:
- Net investment income per share for the quarter was $0.44, compared to $0.45 for the quarter ended March 31, 2023
- Net asset value per share as of the end of the quarter was $15.20, compared to $15.18 as of March 31, 2023, an increase of $0.02 per share primarily due to net investment income above the dividend
- New investment commitments made during the quarter totaled $79 million(1)
- Gross fundings for corporate lending(2), excluding revolver fundings, totaled $73 million and net fundings for corporate lending, including revolvers, totaled $29 million for the quarter
- Net leverage(3) was 1.45x as of June 30, 2023
- Repurchased 198,084 shares of common stock at a weighted average price per share of $11.60, inclusive of commissions, for an aggregate cost of $2.3 million during the quarter
- Amended and extended the Company's senior secured, multi-currency, revolving credit facility (the “Facility”) in April 2023; Maturity date was extended by over two years(4)
- Kroll Bond Rating Agency (KBRA) affirmed the Company’s BBB- issuer and senior unsecured debt ratings in June
- Declared a dividend of $0.38 per share for the quarter ending June 30, 2023(5)
NEW YORK, Aug. 02, 2023 (GLOBE NEWSWIRE) -- MidCap Financial Investment Corporation ( MFIC) or the “Company,” today announced financial results for its quarter ended June 30, 2023. The Company’s net investment income was $0.44 per share for the quarter ended June 30, 2023, compared to $0.45 per share for the quarter ended March 31, 2023. The Company’s net asset value (“NAV”) was $15.20 per share as of June 30, 2023, compared to $15.18 as of March 31, 2023.
On August 2, 2023, the Board of Directors declared a dividend of $0.38 per share payable on September 28, 2023 to shareholders of record as of September 12, 2023.
Mr. Tanner Powell, the Company’s Chief Executive Officer commented, “We are very pleased with our performance for the June quarter which includes strong net investment income, an increase in net asset value per share, and stable credit quality. Net investment income per share exceeded the quarterly distribution by approximately 16%. We are particularly pleased with these results when considering the relatively muted transaction environment which resulted in below normal prepayment income.” Mr. Powell continued, “These results demonstrate the value of our first lien senior secured investment strategy which continues to perform well, even in a more challenging operating environment.”
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(1) Commitments made for the corporate lending portfolio.
(2) Gross fundings for corporate lending include $0.1 million of equity.
(3) The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
(4) Lender commitments under the Facility will remain $1.705 billion until December 22, 2024 and will decrease to $1.550 billion thereafter. The final maturity date was extended by over two years from December 22, 2025 to April 19, 2028. The primary benchmark applicable to U.S. dollars was changed from LIBOR to SOFR and the spread under the facility was changed from 2% to an all-in spread of 1.975%, depending on the Gross Borrowing Base at the time. The covenants and representations and warranties the Company is required to comply with were also modified, but the remaining terms and conditions of the Facility remain substantially the same.
(5) The dividend is payable on September 28, 2023 to stockholders of record on September 12, 2023.
FINANCIAL HIGHLIGHTS
| ($ in billions, except per share data) | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | |||||||||||
| Total assets | $ | 2.50 | $ | 2.49 | $ | 2.53 | $ | 2.57 | $ | 2.64 | ||||||
| Investment portfolio (fair value) | $ | 2.41 | $ | 2.39 | $ | 2.40 | $ | 2.46 | $ | 2.55 | ||||||
| Debt outstanding | $ | 1.48 | $ | 1.47 | $ | 1.48 | $ | 1.50 | $ | 1.60 | ||||||
| Net assets | $ | 0.99 | $ | 0.99 | $ | 0.99 | $ | 1.01 | $ | 0.99 | ||||||
| Net asset value per share | $ | 15.20 | $ | 15.18 | $ | 15.10 | $ | 15.45 | $ | 15.52 | ||||||
| Debt-to-equity ratio | 1.49 x | 1.48 x | 1.50 x | 1.49 x | 1.62 x | |||||||||||
| Net leverage ratio (1) | 1.45 x | 1.41 x | 1.41 x | 1.42 x | 1.58 x | |||||||||||
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(1) The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
PORTFOLIO AND INVESTMENT ACTIVITY
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in millions)* | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Investments made in portfolio companies | $ | 101.6 | $ | 227.4 | $ | 252.7 | $ | 447.5 | ||||||||
| Investments sold | — | — | — | (9.7 | ) | |||||||||||
| Net activity before repaid investments | 101.6 | 227.4 | 252.7 | 437.8 | ||||||||||||
| Investments repaid | (79.2 | ) | (184.0 | ) | (250.8 | ) | (448.6 | ) | ||||||||
| Net investment activity | $ | 22.4 | $ | 43.4 | $ | 1.9 | $ | (10.8 | ) | |||||||
| Portfolio companies, at beginning of period | 141 | 139 | 135 | 139 | ||||||||||||
| Number of investments in new portfolio companies | 12 | 7 | 20 | 13 | ||||||||||||
| Number of exited companies | (3 | ) | (6 | ) | (5 | ) | (12 | ) | ||||||||
| Portfolio companies at end of period | 150 | 140 | 150 | 140 | ||||||||||||
| Number of investments in existing portfolio companies | 40 | 53 | 61 | 72 | ||||||||||||
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* Totals may not foot due to rounding.
OPERATING RESULTS
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in millions)* | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net investment income | $ | 28.9 | $ | 23.5 | $ | 58.3 | $ | 50.4 | ||||||||
| Net realized and change in unrealized gains (losses) | (3.4 | ) | (17.8 | ) | (2.8 | ) | (40.5 | ) | ||||||||
| Net increase in net assets resulting from operations | $ | 25.4 | $ | 5.7 | $ | 55.5 | $ | 9.9 | ||||||||
| (per share)* (1) | ||||||||||||||||
| Net investment income on per average share basis | $ | 0.44 | $ | 0.37 | $ | 0.89 | $ | 0.79 | ||||||||
| Net realized and change in unrealized gain (loss) per share | (0.05 | ) | (0.28 | ) | (0.04 | ) | (0.63 | ) | ||||||||
| Earnings per share — basic | $ | 0.39 | $ | 0.09 | $ | 0.85 | $ | 0.16 | ||||||||
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* Totals may not foot due to rounding.
(1) Based on the weighted average number of shares outstanding for the period presented.
SHARE REPURCHASE PROGRAM *
During the three months ended June 30, 2023, the Company repurchased 198,084 shares at a weighted average price per share of $11.60, inclusive of commissions, for a total cost of $2.3 million. This represent a discount of approximately 23.63% of the average net asset value per share for the three months ended June 30, 2023.
Since the inception of the share repurchase program and through August 1, 2023, the Company repurchased 15,593,120 shares at a weighted average price per share of $15.91, inclusive of commissions, for a total cost of $248.1 million, leaving a maximum of $26.9 million available for future purchases under the current Board authorization of $275 million.
* Share figures have been adjusted for the 1-for-3 reverse stock split which was completed after market close on November 30, 2018.
LIQUIDITY
As of June 30, 2023, the Company’s outstanding debt obligations, excluding deferred financing cost and debt discount of $3.6 million, totaled $1.486 billion which was comprised of $350 million of Senior Unsecured Notes (the “2025 Notes”) which will mature on March 3, 2025, $125 million of Unsecured Notes (the “2026 Notes”) which will mature on July 16, 2026 and $1.0 billion outstanding under the multi-currency revolving credit facility (the “Facility”). As of June 30, 2023, $59.7 million in standby letters of credit were issued through the Facility. The available remaining capacity under the Facility was $634.2 million as of June 30, 2023, which is subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio.
On April 19, 2023, the Company amended and extended the Facility. Lender commitments under the Facility will remain $1.705 billion until December 22, 2024 and will decrease to $1.550 billion thereafter. The final maturity date was extended by over two years from December 22, 2025 to April 19, 2028. The primary benchmark applicable to U.S. dollars was changed from LIBOR to SOFR and the spread under the facility was changed from 2% to an all-in spread of 1.975% depending on the Gross Borrowing Base at the time. The covenants and representations and warranties the Company is required to comply with were also modified, but the remaining terms and conditions of the Facility remain substantially the same.
CONFERENCE CALL / WEBCAST AT 5:00 PM EDT ON AUGUST 2, 2023
The Company will host a conference call on Wednesday, August 2, 2023, at 5:00 p.m. Eastern Time. All interested parties are welcome to participate in the conference call by dialing (800) 343-4849 approximately 5-10 minutes prior to the call; international callers should dial (203) 518-9783. Participants should reference either MidCap Financial Investment Corporation Earnings or Conference ID: MFIC0802 when prompted. A simultaneous webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Events Calendar in the Shareholders section of our website at www.midcapfinancialic.com. Following the call, you may access a replay of the event either telephonically or via audio webcast. The telephonic replay will be available approximately two hours after the live call and through August 23, 2023, by dialing (800) 925-9941; international callers should dial (402) 220-5395. A replay of the audio webcast will also be available later that same day. To access the audio webcast please visit the Events Calendar in the Shareholders section of our website at www.midcapfinancialic.com.
SUPPLEMENTAL INFORMATION
The Company provides a supplemental information package to offer more transparency into its financial results and make its reporting more informative and easier to follow. The supplemental package is available in the Shareholders section of the Company’s website under Presentations at www.midcapfinancialic.com.
Our portfolio composition and weighted average yields as of June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022 were as follows:
| June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | |||||||||||
| Portfolio composition, at fair value: | |||||||||||||||
| First lien secured debt | 88% | 89% | 89% | 87% | 91% | ||||||||||
| Second lien secured debt | 3% | 3% | 3% | 4% | 4% | ||||||||||
| Total secured debt | 91% | 92% | 92% | 91% | 95% | ||||||||||
| Unsecured debt | 0% | 0% | —% | —% | —% | ||||||||||
| Structured products and other | 2% | 0% | 0% | 0% | 0% | ||||||||||
| Preferred equity | 1% | 2% | 2% | 2% | 1% | ||||||||||
| Common equity/interests and warrants | 6% | 6% | 6% | 7% | 4% | ||||||||||
| Weighted average yields, at amortized cost (1): | |||||||||||||||
| First lien secured debt (2) | 11.7% | 11.4% | 10.8% | 9.6% | 8.4% | ||||||||||
| Second lien secured debt (2) | 14.2% | 13.7% | 13.2% | 11.8% | 11.7% | ||||||||||
| Total secured debt (2) | 11.8% | 11.4% | 10.9% | 9.6% | 8.6% | ||||||||||
| Unsecured debt portfolio (2) | 10.0% | 10.0% | 10.0% | —% | —% | ||||||||||
| Total debt portfolio (2) | 11.8% | 11.4% | 10.9% | 9.6% | 8.6% | ||||||||||
| Total portfolio (3) | 10.0% | 9.7% | 9.3% | 8.0% | 7.5% | ||||||||||
| Interest rate type, at fair value (4): | |||||||||||||||
| Fixed rate amount | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | $ | 0.0 billion | |||||
| Floating rate amount | $ | 2.1 billion | $ | 2.1 billion | $ | 2.0 billion | $ | 2.0 billion | $ | 2.1 billion | |||||
| Fixed rate, as percentage of total | 0% | ||||||||||||||
