Core Viewpoint - PennantPark Floating Rate Capital (PFLT) is facing significant financial strain as it pays out 171% of its earnings in dividends, raising concerns about the sustainability of its dividend policy amid declining net income and increasing debt levels [1]. Financial Performance - PFLT reported a net income of $66.4 million for fiscal 2025, a decrease of 27.8% from $91.8 million in the previous year [1]. - The diluted earnings per share (EPS) for the trailing twelve months was $0.72, leading to an earnings payout ratio of 171% against an annual dividend of $1.23 per share [1]. - In Q1 2025, net income fell sharply to just $1.2 million, indicating high volatility in earnings [1]. Debt and Leverage - Total debt increased by 50.9% to $1.78 billion in fiscal 2025, while shareholder equity grew only 22.5% to $1.07 billion [1]. - The debt-to-equity ratio reached 1.65x, which is considered elevated for a business development company (BDC) [1]. - Cash reserves stood at $122.7 million, which is insufficient against $184.6 million in short-term debt [1]. Dividend Policy and Management Outlook - PFLT has maintained its monthly dividend of $0.1025 for over 14 years, but the current rate has not changed since June 2023 [1]. - CEO Art Penn expressed cautious optimism about stabilizing net investment income (NII) and targeting growth through a new joint venture with Hamilton Lane [1]. - The sustainability of the dividend is contingent on whether net investment income can stabilize above $100 million annually and the success of the new joint venture [1].

Core Insights - The article discusses the author's journey from a political career to value investing, emphasizing the importance of risk management and long-term wealth growth [1] Group 1: Career Transition - The author initially pursued a career in politics but shifted to finance after facing challenges in 2019, recognizing the need for financial stability [1] - The transition to value investing was motivated by a desire to make money work effectively and to protect against future setbacks [1] Group 2: Professional Experience - From 2020 to 2022, the author worked in a sales role at a law firm, where they became the top-grossing salesman and managed a team, contributing to sales strategy [1] - The experience gained during this period was instrumental in assessing company prospects based on sales strategies [1] Group 3: Investment Advisory Role - Between 2022 and 2023, the author served as an investment advisory representative with Fidelity, focusing on 401K planning [1] - The author excelled in this role, passing Series exams ahead of schedule, but felt constrained by Fidelity's reliance on modern portfolio theory, leading to a decision to leave after a year [1] Group 4: Current Endeavors - In November 2023, the author began writing for Seeking Alpha, sharing investment opportunities discovered through personal experience [1] - The articles serve as a platform for the author to communicate investment strategies and insights to readers, who are considered to be on a similar journey [1]

Financial Data and Key Metrics Changes - For the quarter ended December 31st, Core Net Investment Income was $0.27 per share, consistent with GAAP net investment income [5][14] - Net realized and unrealized change on investments resulted in a loss of $30 million, with NAV decreasing to $10.49 per share, down 3.1% from the previous quarter [14] - Debt-to-equity ratio was reported at 1.57x, which was reduced to 1.5x after selling assets post-quarter end [15] Business Line Data and Key Metrics Changes - The new joint venture, PSSL II, invested $197 million during the quarter and an additional $133 million after the quarter end, with a total portfolio currently at $326 million [5][6] - The portfolio remains well-diversified, comprising 160 companies across 50 industries, with a weighted average yield on debt investments at 9.9% [15][16] - PIK interest represented only 2.5% of total interest income, indicating a conservative portfolio structure [8][16] Market Data and Key Metrics Changes - The current market environment shows an increase in M&A transaction activity across the private middle market, expanding the pipeline of new investment opportunities [6][7] - Pricing on high-quality first lien term loans remains attractive, typically ranging from SOFR plus 475-525 basis points, with leverage around 4.5x EBITDA [7] Company Strategy and Development Direction - The company aims to scale PSSL II to over $1 billion in assets, consistent with existing joint ventures, focusing on generating a steady, stable dividend stream while preserving capital [6][13] - The strategy emphasizes strong private equity sponsor relationships and disciplined underwriting, which are seen as competitive advantages in the current lending environment [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the M&A activity driving repayments of existing portfolio investments and the potential for equity rotation into new income-producing investments [6][24] - The company believes it is well-positioned to cover dividends as the new joint venture ramps up, although this will depend on M&A activity and market conditions [24][25] Other Important Information - The company has invested $8.7 billion in 545 companies, with a loss ratio on invested capital of only 13 basis points annually since inception [12] - The focus remains on core middle market companies, typically those with $10 million-$50 million of EBITDA, which operate below the threshold of high yield markets [11] Q&A Session Summary Question: Why is software such a low exposure within the portfolio? - Management indicated that the low exposure to software (4.4%) is a strategic decision to focus on cash flow loans with reasonable multiples and strong covenant protections, avoiding high-leverage, covenant-lite structures prevalent in the market [19][21] Question: Does the expectation to cover the dividend assume full optimization of the new joint venture? - Management confirmed that the expectation to cover the dividend is based on ramping the joint venture to about $1 billion in assets, with M&A activity being a key driver [22][24] Question: What are the drivers of the unrealized marks in the quarter? - Management noted that most markdowns were related to the 2021 vintage, with some specific companies experiencing softness, but they do not foresee significant additional markdowns in the near term [40][44] Question: What is the mix of loans by vintage year in the portfolio? - Management did not have the exact data on hand but suggested that it would be useful for further analysis [45] Question: Is there a lot of activity around the software sector in M&A? - Management indicated that they are not major players in the software lending space and suggested that M&A activity in the sector may be lower as the market stabilizes [49][51]

Financial Data and Key Metrics Changes - For the quarter ended December 31, Core Net Investment Income was $0.27 per share, consistent with GAAP net investment income [5][14] - NAV decreased by 3.1% from $10.83 per share to $10.49 per share [14] - Debt-to-equity ratio was 1.57 times, reduced to 1.5 times after asset sales post-quarter end [15] Business Line Data and Key Metrics Changes - The new joint venture, PSSL Two, invested $197 million during the quarter, with a total portfolio of $326 million [5][6] - The portfolio remains well-diversified, comprising 160 companies across 50 industries, with a weighted average yield on debt investments of 9.9% [15][16] - PIK interest represented only 2.5% of total interest income, indicating a conservative portfolio structure [8][16] Market Data and Key Metrics Changes - An increase in M&A transaction activity in the private Middle Market is noted, expanding the pipeline of new investment opportunities [6][7] - Pricing on high-quality first lien term loans remains attractive, typically ranging from SOFR plus 475-525 basis points [7] Company Strategy and Development Direction - The company aims to scale PSSL Two to over $1 billion in assets, consistent with existing joint ventures [6] - The focus remains on core Middle Market companies, providing strategic capital with strong underwriting and covenant protections [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in covering dividends through projected run rate NII from the new joint venture, contingent on M&A activity [24][25] - The current environment is seen as favorable for lenders with strong private equity sponsor relationships [7] Other Important Information - The company has invested $8.7 billion in 545 companies, with a loss ratio on invested capital of only 13 basis points annually [12] - The company continues to originate attractive investment opportunities, investing $301 million at a weighted average yield of 10% during the quarter [12][13] Q&A Session Summary Question: Why is software such a low exposure within the portfolio? - Management indicated that the low exposure is a strategic decision to focus on cash flow loans with reasonable multiples and strong covenants, avoiding high-leverage software loans [19][21] Question: Does the expectation to cover the dividend assume full optimization of the new JV? - Management confirmed that the expectation is based on ramping the JV to about $1 billion, with M&A activity expected to populate the JV and facilitate equity rotation [22][24] Question: What are the drivers of the unrealized marks in the quarter? - Management noted that markdowns were primarily related to the 2021 vintage, with some specific companies experiencing softness, but overall, they do not foresee significant additional markdowns [41][44] Question: What is the mix of loans by vintage year in the portfolio? - Management did not have the exact data on hand but suggested that it would be useful for further analysis [45] Question: Is the $3.6 million charge related to the credit amendment a recurring item? - Management clarified that the charge was about $500,000 and is a one-time item [48]

Financial Data and Key Metrics Changes - For the quarter ended December 31, Core Net Investment Income was $0.27 per share, consistent with GAAP net investment income [5][14] - Net realized and unrealized change on investments resulted in a loss of $30 million, with NAV decreasing to $10.49 per share, down 3.1% from the previous quarter [14] - Debt-to-equity ratio was 1.57 times as of December 31, which was reduced to 1.5 times after subsequent asset sales [15] Business Line Data and Key Metrics Changes - The new joint venture, PSSL Two, invested $197 million during the quarter and an additional $133 million after the quarter end, with a total portfolio of $326 million [5][6] - The portfolio remains well-diversified, comprising 160 companies across 50 industries, with a weighted average yield on debt investments of 9.9% [15][16] - PIK interest represented only 2.5% of total interest income, indicating a conservative portfolio structure [7][16] Market Data and Key Metrics Changes - An increase in M&A transaction activity in the private Middle Market is noted, expanding the pipeline of new investment opportunities [6][7] - The pricing on high-quality first lien term loans remains attractive, typically ranging from SOFR plus 475-525 basis points [7] Company Strategy and Development Direction - The company aims to scale PSSL Two to over $1 billion in assets, consistent with existing joint ventures, focusing on generating a steady dividend stream while preserving capital [6][13] - The strategy emphasizes strong private equity sponsor relationships and disciplined underwriting, which are seen as competitive advantages [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, anticipating that increased M&A activity will drive repayments of existing portfolio investments [6][25] - The company is well-positioned to cover dividends with projected run rate NII as the new joint venture ramps up [25] Other Important Information - The company has invested $8.7 billion in 545 companies, with a loss ratio on invested capital of only 13 basis points annually [12] - The focus remains on core Middle Market companies, typically those with $10-50 million of EBITDA, which operate below the threshold of broadly syndicated loans [11] Q&A Session Summary Question: Why is software such a low exposure within the portfolio? - Management indicated that the low exposure is a strategic decision to focus on cash flow loans at reasonable multiples, avoiding high-leverage, covenant-lite loans prevalent in the software sector [19][21] Question: Does the expectation to cover the dividend assume full optimization of the new joint venture? - Management confirmed that the expectation is based on ramping the joint venture to about $1 billion, with M&A activity expected to populate the JV and facilitate equity rotation [22][25] Question: What are the drivers of the unrealized marks in the quarter? - Management noted that most markdowns are related to the 2021 vintage, with some specific companies experiencing softness, but they do not foresee significant additional markdowns in the near term [41][45]

分组1 - PennantPark (PFLT) reported quarterly earnings of $0.27 per share, missing the Zacks Consensus Estimate of $0.30 per share, and down from $0.33 per share a year ago, representing an earnings surprise of -8.48% [1] - The company posted revenues of $70.09 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 1.72%, and up from $67.01 million year-over-year [2] - Over the last four quarters, PennantPark has not surpassed consensus EPS estimates, but has topped consensus revenue estimates two times [2] 分组2 - The stock's immediate price movement will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - The current consensus EPS estimate for the coming quarter is $0.29 on revenues of $67.42 million, and for the current fiscal year, it is $1.17 on revenues of $271.73 million [7] - The Zacks Industry Rank for Financial - Investment Management is currently in the bottom 44% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Portfolio Overview - As of December 31, 2025, the company's portfolio totaled $2,605.3 million, consisting of $2,310.2 million in first lien secured debt, $20.1 million in second lien secured debt and subordinated debt, and $275.0 million in preferred and common equity[256] - The overall portfolio consisted of 160 companies with an average investment size of $16.3 million as of December 31, 2025[256] - As of September 30, 2025, the portfolio totaled $2,773.3 million, with a weighted average yield on debt investments of 10.2%[257] - As of December 31, 2025, PSSL's portfolio totaled $1,195.0 million, consisting of 120 companies with an average investment size of $10.0 million and a weighted average yield of 9.6%[260] - As of December 31, 2025, the portfolio of PennantPark Senior Secured Loan Fund II LLC totaled $193.2 million, consisting of 41 companies with an average investment size of $4.7 million and a weighted average yield on debt investments of 9.0%[263] Investment Activity - For the three months ended December 31, 2025, the company invested $301.0 million in four new and 51 existing portfolio companies at a weighted average yield of 10.0%[258] - For the three months ended December 31, 2024, the company invested $606.9 million in 11 new and 58 existing portfolio companies at a weighted average yield of 10.3%[259] - For the three months ended December 31, 2025, PSSL invested $133.8 million in four new and 17 existing portfolio companies at a weighted average yield of 9.4%[261] - For the three months ended December 31, 2025, the company invested $196.5 million in 42 new portfolio companies at a weighted average yield of 9.3%, with sales and repayments totaling $2.9 million[264] Financial Performance - For the three months ended December 31, 2025, investment income was $70.1 million, an increase from $67.0 million in the same period of 2024, primarily due to the growth in the debt portfolio[295] - Total expenses for the three months ended December 31, 2025, were $43.5 million, up from $37.0 million in 2024, mainly driven by increased interest expenses from higher borrowings[296] - Net investment income for the three months ended December 31, 2025, was $26.6 million or $0.27 per share, down from $30.0 million or $0.37 per share in 2024, attributed to higher interest expenses and one-time costs[297] - Net realized gains for the three months ended December 31, 2025, were $1.5 million, a significant decrease from $26.7 million in 2024, reflecting changes in market conditions[298] - The net change in unrealized depreciation on investments for the three months ended December 31, 2025, was $(32.3) million, compared to $(29.0) million in 2024, with total unrealized depreciation as of December 31, 2025, at $(78.4) million[299] Debt and Financing - As of December 31, 2025, the Credit Facility had commitments of $768.0 million, with a weighted average interest rate of 5.9%[304] - The annualized weighted average cost of debt for the three months ended December 31, 2025, was 6.2%, down from 7.0% in 2024[305] - The company incurred $0.5 million of expenses related to amendment costs on the Credit Facility during the three months ended December 31, 2025[277] - The company completed a $474.6 million term debt securitization in February 2025, retaining $113.6 million of the debt securitization[320] - The company entered into equity distribution agreements for an aggregate offering price of up to $500.0 million under the 2024 ATM Program[323] Cash and Liquidity - As of December 31, 2025, the company had cash and cash equivalents of $95.3 million, down from $122.7 million as of September 30, 2025[329] - For the three months ended December 31, 2025, operating activities provided cash of $148.6 million, while financing activities used cash of $176.0 million[331] - The company has $192.2 million of common stock available to be sold under the ATM Programs as of December 31, 2025[324] Tax and Regulatory - The company operates to maintain its election as a RIC, resulting in an effective tax rate of 0% before excise tax and income taxes incurred by the Taxable Subsidiary[291] - The company recorded a provision for taxes on net investment income of $0.2 million for both the three months ended December 31, 2025, and 2024[288] Market Conditions and Strategy - The overall market conditions suggest a mixed outlook, with some sectors experiencing growth while others face declines[1][2][3] - Future strategies may involve focusing on product innovation and market expansion to counteract revenue declines in certain sectors[1][2][3] - The company is focused on maintaining a diversified investment strategy across multiple sectors, including containers and packaging, consumer services, and automobiles[346] - Future outlook includes potential market expansions and strategic acquisitions to enhance growth and profitability[346] Investment Sectors - The company is actively investing in sectors such as Business Services, Healthcare, and Media, reflecting a strategic focus on high-growth industries[344] - The overall performance of the healthcare and pharmaceuticals sector shows a coupon rate range from 8.17% to 10.07%, indicating robust market conditions[345] - The company has a significant investment in First Lien Secured Debt, amounting to 1,422.7% of Net Assets[344] Accounting and Reporting - The company has adopted ASC 825-10 for the Credit Facility, allowing it to report selected financial assets and liabilities at fair value, which helps mitigate volatility in earnings[277] - The company has outlined the annualized impact of hypothetical interest rate changes, indicating that a 3% increase in interest rates could lead to a $26.6 million increase in net interest income[375] - The company did not engage in interest rate hedging activities or foreign currency derivatives hedging activities during the reporting periods[377]

EXHIBIT 99.1 PennantPark Floating Rate Capital Ltd. Announces Financial Results for the First Quarter Ended December 31, 2025 MIAMI, Feb. 09, 2026 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) announced today its financial results for the first quarter ended December 31, 2025. HIGHLIGHTS Quarter ended December 31, 2025 (Unaudited) ($ in millions, except per share amounts) | Assets and Liabilities: | | | | --- | --- | --- | | Investment portfolio | $ | 2,605.3 | | Net assets | $ | 1 ...

Core Viewpoint - PennantPark Floating Rate Capital Ltd. reported its financial results for the first quarter ended December 31, 2025, highlighting a decrease in net investment income and net asset value per share, alongside significant portfolio activity and investment performance. Financial Highlights - The investment portfolio totaled $2,605.3 million, with net assets at $1,040.4 million and a net asset value per share of $10.49, reflecting a quarterly change of -3.1% [2] - Net investment income for the quarter was $26.6 million, or $0.27 per share, compared to $30.0 million, or $0.37 per share in the same quarter of the previous year [16][33] - Total investment income increased to $70.1 million from $67.0 million year-over-year, primarily due to a larger debt portfolio [14] Portfolio Activity - The company invested $301.0 million in four new and 51 existing portfolio companies during the quarter, with sales and repayments totaling $441.4 million [7] - The PSSL II joint venture commenced operations, investing approximately $200 million during the quarter, and subsequently upsized its credit facility to $250 million [5][28] - As of December 31, 2025, the portfolio consisted of 160 companies with an average investment size of $16.3 million and a weighted average yield on debt investments of 9.9% [5] Debt and Equity - The debt to equity ratio stood at 1.57x, with a weighted average yield on debt investments at 9.9% [2] - The company had $488.9 million in credit facilities and various asset-backed debts totaling $1,346.3 million [2] Expenses and Income - Total expenses for the quarter were $43.5 million, up from $37.0 million in the previous year, driven by increased interest expenses [15] - Net realized gains for the quarter were $1.5 million, a significant decrease from $26.7 million in the same quarter of the previous year [17] Liquidity and Capital Resources - Cash and cash equivalents were reported at $95.3 million as of December 31, 2025, down from $122.7 million at the end of the previous quarter [23] - The company generated $148.6 million from operating activities, while financing activities used $176.0 million [25] Distributions - Distributions declared per share were $0.31, totaling $30.5 million for the quarter, compared to $25.2 million in the same quarter of the previous year [27]

Financial Data and Key Metrics Changes - The company held its Annual General Meeting on February 3, 2026, where it reported the election of two directors and the ratification of its independent accounting firm for the fiscal year ending September 30, 2026 [10][11]. Business Line Data and Key Metrics Changes - No specific financial data or key metrics related to business lines were provided in the meeting [12]. Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the meeting [12]. Company Strategy and Development Direction and Industry Competition - The company is focused on maintaining its governance structure by electing directors and ensuring the continuity of its independent audit firm, which reflects a commitment to corporate governance and transparency [10][11]. Management Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting [12]. Other Important Information - The meeting was conducted virtually, and stockholders were encouraged to participate through a web portal [4][5]. - The company confirmed that a quorum was present for conducting business [6]. Q&A Session Summary - No questions were submitted during the Q&A session, and the meeting concluded without any further inquiries from stockholders [12].