PennantPark Floating Rate Capital (NYSE:PFLT) Q3 2023 Earnings Conference Call August 10, 2023 9:00 AM ET Company Participants Arthur Penn - Founder, Chairman & Chief Executive Officer Richard Allorto - Chief Financial Officer Conference Call Participants Paul Johnson - KBW Vilas Abraham - UBS Mark Hughes - Truist Operator Good morning, and welcome to the PennantPark Floating Rate Capital's Third Fiscal Quarter 2023 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] It i ...

[PART I. CONSOLIDATED FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20CONSOLIDATED%20FINANCIAL%20INFORMATION) This section presents the company's consolidated financial statements and related disclosures [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for PennantPark Floating Rate Capital Ltd. as of June 30, 2023, and for the three and nine months then ended [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of June 30, 2023, total assets were **$1.18 billion**, a decrease from **$1.22 billion** at September 30, 2022 Consolidated Balance Sheet Summary (in thousands, except per share data) | Metric | June 30, 2023 | September 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Total Investments (Fair Value) | $1,105,265 | $1,164,254 | -5.1% | | Total Assets | $1,183,223 | $1,223,866 | -3.3% | | Total Liabilities | $574,796 | $696,774 | -17.5% | | Total Net Assets | $608,427 | $527,092 | +15.4% | | Net Asset Value per Share | $10.96 | $11.62 | -5.7% | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2023, total investment income increased **46.6%** year-over-year to **$37.7 million**, driven by higher interest income Operating Results Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Nine Months Ended June 30, 2023 | Nine Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Investment Income | $37,713 | $25,729 | $103,603 | $76,699 | | Total Expenses | $19,211 | $13,906 | $54,626 | $40,773 | | Net Investment Income | $18,502 | $11,823 | $48,977 | $35,926 | | Net Realized/Unrealized Loss | $(12,909) | $(16,908) | $(37,762) | $(19,334) | | Net Increase (Decrease) in Net Assets | $5,593 | $(5,085) | $11,215 | $16,592 | | Net Investment Income per Share | $0.36 | $0.29 | $1.02 | $0.90 | | Net Increase (Decrease) in Net Assets per Share | $0.11 | $(0.12) | $0.23 | $0.42 | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments) As of June 30, 2023, the company's total investment portfolio had a fair value of **$1.105 billion**, down from **$1.164 billion** at September 30, 2022 Portfolio Composition by Investment Type (as of June 30, 2023, in thousands) | Investment Type | Fair Value (in thousands) | % of Total Investments | | :--- | :--- | :--- | | First Lien Secured Debt | $950,244 | 86.0% | | Second Lien Secured Debt | $149 | <0.1% | | Preferred Equity | $12,930 | 1.2% | | Common Equity/Warrants | $91,727 | 8.3% | | Equity Interests in PSSL | $50,216 | 4.5% | | **Total Investments** | **$1,105,265** | **100.0%** | Top 5 Industry Concentrations (as of June 30, 2023, % of portfolio excluding cash) | Industry Classification | Percentage of Portfolio | | :--- | :--- | | Media | 8% | | Personal Products | 8% | | Professional Services | 7% | | IT Services | 7% | | Commercial Services & Supplies | 6% | [Notes to Consolidated Financial Statements](index=22&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's organization as a BDC, significant accounting policies including investment valuation methodologies, and related-party agreements - The company's investment objective is to generate current income and capital appreciation by investing primarily in floating rate loans to U.S. middle-market private companies. At least **80%** of managed assets are expected to be in floating rate loans, with at least **65%** of the portfolio in first lien secured debt[50](index=50&type=chunk) - The company utilizes a multi-step valuation process for illiquid investments, involving its Investment Adviser, independent valuation firms, the audit committee, and the board of directors to determine fair value in good faith[63](index=63&type=chunk)[68](index=68&type=chunk) - The Investment Adviser earns a base management fee of **1.00%** of average adjusted gross assets and a two-part incentive fee based on pre-incentive fee net investment income and realized capital gains[90](index=90&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk) - As of June 30, 2023, the company had **$150.3 million** in unfunded commitments to portfolio companies and zero remaining unfunded commitment to its PSSL joint venture[167](index=167&type=chunk) - Subsequent to quarter-end, the company issued **3.2 million** shares via its ATM Program for **$35.2 million** in net proceeds and increased its Credit Facility commitment by **$20 million** to **$386 million**[170](index=170&type=chunk)[171](index=171&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, portfolio activity, and liquidity [Portfolio and Investment Activity](index=45&type=section&id=Portfolio%20and%20Investment%20Activity) As of June 30, 2023, the portfolio totaled **$1.105 billion** across 130 companies, with a weighted average yield of **12.4%**, up from **10.0%** at September 30, 2022 Portfolio Summary | Metric | June 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | Total Portfolio Value | $1,105.3 million | $1,164.3 million | | Number of Companies | 130 | 125 | | Weighted Avg. Yield on Debt | 12.4% | 10.0% | | % First Lien Secured Debt | 86% | 87% | | Non-Accrual (at cost) | 1.0% | 0.9% | - For the nine months ended June 30, 2023, the company invested **$231.0 million** in 13 new and 63 existing portfolio companies. Sales and repayments totaled **$258.1 million**, including **$121.2 million** of sales to the PSSL joint venture[201](index=201&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) For the three months ended June 30, 2023, investment income rose to **$37.7 million** from **$25.7 million** year-over-year, driven by higher portfolio yields - The increase in investment income for the three and nine months ended June 30, 2023, was primarily due to a higher cost yield on the debt portfolio and a dividend from the Dominion Voting Systems equity investment[236](index=236&type=chunk) - The increase in expenses was primarily driven by higher financing costs on debt liabilities and a rise in performance-based incentive fees resulting from higher pre-incentive fee net investment income[237](index=237&type=chunk) - For the nine months ended June 30, 2023, the company reported a net change in unrealized depreciation on investments of **$22.0 million**, primarily due to the operating performance of portfolio companies and changes in capital market conditions[241](index=241&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is sourced from operations, investment repayments, and debt and equity financing - As of June 30, 2023, the company's asset coverage ratio was **210%**, compared to the minimum required **150%**[245](index=245&type=chunk) Debt and Liquidity Summary (as of June 30, 2023) | Facility | Total Size/Principal | Outstanding | Unused Capacity | | :--- | :--- | :--- | :--- | | Credit Facility | $366.0 million | $64.4 million | $301.6 million | | 2023 Notes | $138.6 million (original) | $76.2 million | N/A | | 2026 Notes | $185.0 million | $185.0 million | N/A | | 2031 Asset-Backed Debt | $301.4 million (original) | $228.0 million | N/A | - During the three months ended June 30, 2023, the company raised **$64.1 million** in net proceeds by issuing **5.8 million** shares through its ATM Program[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk, as **100%** of its debt portfolio consists of variable-rate investments, while its borrowings also have variable components - As of June 30, 2023, **100%** of the company's debt portfolio consisted of variable-rate investments, making its income sensitive to changes in interest rates like SOFR[296](index=296&type=chunk) Annualized Impact of Hypothetical Interest Rate Changes (in thousands) | Change in Interest Rates | Change in Net Interest Income (in thousands) | Change in Net Interest Income Per Share | | :--- | :--- | :--- | | Down 1% | $(7,182) | $(0.13) | | Up 1% | $7,182 | $0.13 | | Up 2% | $14,364 | $0.26 | | Up 3% | $21,545 | $0.39 | | Up 4% | $28,741 | $0.52 | [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2023 - A material weakness related to the timely transmission of portfolio company financial information to independent valuation service providers, identified in the fiscal year 2022 10-K, has been remediated[300](index=300&type=chunk) - Management concluded that as of June 30, 2023, the company's disclosure controls and procedures were effective at a reasonable assurance level[301](index=301&type=chunk) [PART II. OTHER INFORMATION](index=58&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, and other disclosures [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that neither it, its Investment Adviser, nor its Administrator is currently subject to any material legal proceedings - The company, its Investment Adviser, and its Administrator are not currently subject to any material legal proceedings[304](index=304&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section highlights a specific risk concerning cash balances held by the company and its portfolio companies at financial institutions, which may exceed federally insured (FDIC) limits - A key risk factor is that the company and its portfolio companies may hold cash balances at financial institutions in excess of FDIC insurance limits, exposing them to potential loss in the event of a bank failure[306](index=306&type=chunk) - Adverse developments in the financial services industry, such as liquidity constraints or instability, could significantly impair the company's and its portfolio companies' access to funding and credit[307](index=307&type=chunk)[308](index=308&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[310](index=310&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[311](index=311&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) The company states that none of its officers or directors have adopted or terminated any Rule 10b5-1 trading arrangements - No officers or directors have adopted or terminated any Rule 10b5-1 trading arrangements[313](index=313&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including CEO and CFO certifications and Inline XBRL documents

PennantPark Floating Rate Capital (NYSE:PFLT) Q2 2023 Earnings Conference Call May 10, 2023 9:00 AM ET Company Participants Arthur Penn - Founder, Chairman & Chief Executive Officer Richard Allorto - Chief Financial Officer Conference Call Participants Paul Johnson - KBW Kevin Fultz - JMP Securities Mickey Schleien - Ladenburg Thalmann Mark Hughes - Truist Operator Good morning, and welcome to the PennantPark Floating Rate Capital Second Fiscal Quarter 2023 Earnings Conference Call. Today's conference is be ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 814-00891 PENNANTPARK FLOATING RATE CAPITAL LTD. (Exact name of registrant as specified in its charter) MARYLAND 27-3794690 (State ...

PennantPark Floating Rate Capital (NYSE:PFLT) Q1 2023 Earnings Conference Call February 9, 2023 9:00 AM ET Company Participants Art Penn - Chairman and Chief Executive Officer Rick Allorto - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Paul Johnson - KBW Kevin Fultz - JMP Securities Mark Hughes - Truist Operator Good morning and welcome to the PennantPark Floating Rate Capital's First Fiscal Quarter 2023 Earnings Conference Call. Today's conference is being recorded. [Ope ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 814-00891 PENNANTPARK FLOATING RATE CAPITAL LTD. (Exact name of registrant as specified in its charter) FORM 10-Q (State or other jurisdic ...

PennantPark Floating Rate Capital (NYSE:PFLT) Q4 2022 Earnings Conference Call November 17, 2022 9:00 AM ET Company Participants Art Penn - Founder, Chairman & Chief Executive Officer Richard Allorto - Chief Financial Officer Conference Call Participants Paul Johnson - KBW Mickey Schleien - Ladenburg Thalmann Operator Good morning and welcome to the PennantPark Floating Rate Capital's Fourth Fiscal Quarter 2022 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] It is now ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2022 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 814-00891 PENNANTPARK FLOATING RATE CAPITAL LTD. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inc ...

Financial Data and Key Metrics Changes - For the quarter ended June 30th, net investment income was $0.29 per share, including $0.01 of other non-recurring income [7][18] - GAAP NAV decreased by 3.2% to $12.21 per share, driven primarily by a decrease in investment valuations [7][18] - The debt-to-equity ratio was 1.5x, indicating a diversified capital structure with no near-term maturities [19] Business Line Data and Key Metrics Changes - The joint venture (JV) portfolio reached $747 million, with a target to grow to $1 billion over time [8] - The portfolio remains highly diversified, with 87% invested in first lien senior secured debt and 13% in equity [19] Market Data and Key Metrics Changes - The portfolio is 100% floating rate, with 82% having a LIBOR floor, which positions the company well for rising interest rates [19] - A 100 basis point increase in base rates translates into approximately $0.04 per quarter of net interest income [9] Company Strategy and Development Direction - The company focuses on financing high-growth middle market companies in five key sectors: business services, consumer, government services and defense, healthcare, and software and technology [10] - The company aims to preserve capital while seeking investment opportunities in growing middle market companies with high free cash flow conversion [16] Management's Comments on Operating Environment and Future Outlook - Management believes the portfolio is well-positioned to grow net investment income as base rates rise, with a significant cushion to support stable investment income [14] - The company is optimistic about the performance of its borrowers and the overall credit quality of the portfolio [14][15] Other Important Information - The company has only two non-accruals out of 123 investments, representing 0.9% of the portfolio at cost [15] - The company has a long-term track record of generating value, with an IRR of 28% on equity co-investments since inception [11] Q&A Session Summary Question: Breakdown of unrealized losses recorded in the quarter - Management indicated that the unrealized losses were primarily driven by market and credit spreads rather than specific credit events [24] Question: Positive events regarding marketplace events returning to accrual status - Management explained that the recovery of a home goods tradeshow business impacted by COVID is a positive development as the company normalizes [25] Question: Target year for growing the PSSL to $1 billion - Management estimated that the PSSL could reach $1 billion in the next 18 months to two years, depending on market opportunities [27] Question: Incremental NII per share impact from rising base rates - Management noted that while there are many variables, the portfolio is positioned to benefit from rising rates, with a significant portion already capturing the rising rate environment [30] Question: Attractive industries in the current environment - Management highlighted government services and defense as sectors with strong creditworthiness and stability, while being cautious in the consumer sector [31]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 814-00891 PENNANTPARK FLOATING RATE CAPITAL LTD. (Exact name of registrant as specified in its charter) MARYLAND 27-3794690 (State o ...