Portfolio Overview - As of March 31, 2025, the portfolio totaled $1,213.6 million, with 41% in first lien secured debt and a weighted average yield on interest-bearing debt investments of 12.0%[234] - As of September 30, 2024, the portfolio totaled $1,328.1 million, with 50% in first lien secured debt and a weighted average yield on interest-bearing debt investments of 12.3%[235] - The average investment size in the overall portfolio was $6.9 million as of March 31, 2025[234] - PSLF's portfolio as of March 31, 2025, totaled $1,392.9 million, with a weighted average yield on interest-bearing debt investments of 10.4%[239] - As of March 31, 2025, the PennantPark Senior Loan Fund (PSLF) had total assets of $1,463.5 million, an increase from $1,073.4 million as of September 30, 2024[293] - The investment portfolio of PSLF consisted of debt investments in 119 portfolio companies as of March 31, 2025, compared to 102 companies as of September 30, 2024[293] Investment Activity - For the three months ended March 31, 2025, the company invested $176.8 million in three new and 52 existing portfolio companies, with a weighted average yield on debt investments of 10.7%[236] - For the three months ended March 31, 2024, the company invested $188.5 million in six new and 43 existing portfolio companies, with a weighted average yield of 11.7%[237] - For the six months ended March 31, 2025, PSLF invested $523.7 million in 23 new and 57 existing portfolio companies[240] - For the six months ended March 31, 2024, PSLF's total investments amounted to $194.2 million, with a weighted average yield of 12.2%[241] Financial Performance - For the three and six months ended March 31, 2025, investment income was $30.7 million and $64.9 million, respectively, a decrease from $36.0 million and $70.3 million for the same periods in 2024[270] - For the three and six months ended March 31, 2025, expenses totaled $19.2 million and $40.4 million, respectively, down from $21.7 million and $40.4 million in 2024[271] - Net investment income for the three and six months ended March 31, 2025, was $11.4 million and $24.4 million, or $0.18 and $0.37 per share, compared to $14.3 million and $29.9 million, or $0.22 and $0.46 per share in 2024[272] - For the three and six months ended March 31, 2025, net realized losses totaled $(27.7) million and $(30.3) million, compared to $(31.0) million and $(29.2) million in 2024[273] - The net change in unrealized appreciation on investments for the three and six months ended March 31, 2025, was $27.1 million and $29.5 million, respectively, down from $33.2 million and $28.3 million in 2024[274] Debt and Financing - The company expects to continue using debt capital and proceeds from public and private offerings to finance investment objectives[228] - The Truist Credit Facility had outstanding borrowings of $314.5 million as of March 31, 2025, with a weighted average interest rate of 6.7%[280] - PSLF entered into a $400.0 million senior secured revolving credit facility, increased from $325.0 million in August 2024[296] - The company has not engaged in interest rate hedging activities during the reporting periods, which may expose it to risks associated with interest rate fluctuations[326] Cash and Liquidity - As of March 31, 2025, the company had cash and cash equivalents of $32.6 million, down from $49.9 million as of September 30, 2024[289] - For the six months ended March 31, 2025, operating activities provided cash of $161.1 million, while financing activities used cash of $178.3 million, primarily for credit facility repayments and stockholder distributions[290] - Cash and cash equivalents increased to $62,201,000 as of March 31, 2025, from $36,595,000 as of September 30, 2024, reflecting a growth of 70%[309] Distributions - The company must distribute dividends equal to at least 90% of its net ordinary income and realized net short-term capital gains to maintain its RIC tax election[259] - The company declared distributions of $0.24 per share for the three months ended March 31, 2025, compared to $0.21 per share in the same period of 2024, reflecting a 14.3% increase[314] - The company transitioned from quarterly to monthly distributions effective October 2023, with future monthly distributions determined by the board of directors[315] Valuation and Accounting - PSLF's portfolio generally consists of illiquid securities, and the board of directors undertakes a multi-step valuation process each quarter for investments without readily available market quotations[246] - The company has adopted ASC 825-10 for the Truist Credit Facility, incurring $0.3 million in expenses related to amendment costs for the three and six months ended March 31, 2025[252] - The company has adopted ASU 2022-03, which clarifies fair value measurement disclosures, with no material impact on consolidated financial statements[320] - The FASB issued ASU 2023-07, effective for fiscal years beginning after December 15, 2023, which will enhance segment disclosure requirements, currently under evaluation by the company[321] Market and Sector Analysis - The average coupon rates for various sectors include 11.55% for software and 10.69% for transportation, indicating a diverse interest rate environment across industries[303] - The healthcare, education, and childcare sector shows a notable interest rate of 10.65% for NORA Acquisition, LLC, highlighting the sector's investment attractiveness[303] - The company has a diverse portfolio with investments across various sectors, including aerospace and defense, healthcare, and business services, indicating a strategic approach to market expansion[303]

Financial Performance - For the quarter ended March 31, 2025, the investment portfolio totaled $1,213.6 million, with net assets of $488.1 million and a GAAP net asset value per share of $7.48, reflecting a quarterly change of (1.2)%[2] - Net investment income for the quarter was $11.4 million, or $0.18 per share, down from $14.3 million or $0.22 per share in the same quarter of 2024[16] - The company reported net realized losses of $(27.7) million for the quarter, compared to $(31.0) million in the same quarter of 2024[17] - Total investment income for the six months ended March 31, 2025, was $64.9 million, compared to $70.3 million for the same period in 2024[32] - The net increase in net assets resulting from operations was $9,456 million, down from $16,085 million, indicating a decline of about 41.1%[33] - Net investment income per common share decreased to $0.18 from $0.22, representing a decline of 18.2%[33] - The provision for taxes on net investment was $550 million, down from $775 million, reflecting a decrease of approximately 29.0%[33] Portfolio and Investments - The portfolio had net unrealized appreciation of $40.7 million as of March 31, 2025, with a net change in unrealized appreciation of $27.1 million for the quarter[18] - The company invested $176.8 million in the quarter across three new and 52 existing portfolio companies, with a weighted average yield on debt investments of 10.7%[7] - The weighted average yield on debt investments across the portfolio was 12.0% as of March 31, 2025[5] - As of March 31, 2025, the company had three portfolio companies on non-accrual, representing 1.6% of the overall portfolio on a cost basis[5] - The net change in unrealized appreciation on investments and debt was $25,790 million, compared to $32,863 million in the previous period, showing a decrease of about 21.5%[33] - The net increase in unrealized appreciation on non-controlled, non-affiliated investments was $17,918 million, compared to a loss of $1,528 million previously[33] Expenses and Distributions - Total expenses for the quarter were $19.2 million, a decrease from $21.7 million in the same quarter of 2024, primarily due to lower interest and incentive fees[15] - The company declared distributions of $0.24 per share for the quarter, supported by substantial spillover income[5] - Total distributions declared during the three and six months ended March 31, 2025, were $15.7 million and $31.3 million, respectively, compared to $13.7 million and $27.4 million for the same periods in 2024[26] Assets and Liabilities - The company's total assets decreased from $1,389.1 million as of September 30, 2024, to $1,257.8 million as of March 31, 2025[29] - The net asset value per share decreased from $7.56 as of September 30, 2024, to $7.48 as of March 31, 2025[30] - As of March 31, 2025, the company had outstanding borrowings of $314.5 million under the Truist Credit Facility, with a weighted average interest rate of 6.7%[22] - Unused borrowing capacity under the Truist Credit Facility was $185.5 million as of March 31, 2025, compared to $13.5 million as of September 30, 2024[22] - The company had cash and cash equivalents of $32.6 million as of March 31, 2025, down from $49.9 million as of September 30, 2024[23] Strategic Focus - The company plans to rotate equity investments over time to support its dividend stream[5] - The company anticipates continued focus on middle-market companies for investment opportunities, leveraging its established credit platform[34] - The company has no plans to update forward-looking statements made in periodic reports, emphasizing the inherent risks and uncertainties involved[37]

Core Viewpoint - PennantPark Investment Corporation reported its financial results for the second quarter ended March 31, 2025, highlighting a decrease in net investment income and net asset value per share, alongside significant portfolio activity and investment performance metrics [1][2][4]. Financial Highlights - Investment portfolio totaled $1,213.6 million with net assets of $488.1 million as of March 31, 2025 [2]. - GAAP net asset value per share was $7.48, reflecting a quarterly change of -1.2% [2]. - Net investment income for the quarter was $11.4 million, or $0.18 per share, down from $14.3 million or $0.22 per share in the same quarter of the previous year [15]. - Total investment income for the quarter was $30.7 million, compared to $36.0 million in the prior year [13]. Portfolio Activity - The company made purchases of investments totaling $176.8 million and sales and repayments of investments amounting to $263.1 million during the quarter [2][6]. - The portfolio consisted of 158 companies with an average investment size of $6.9 million, and a weighted average yield on debt investments of 12.0% [4]. - As of March 31, 2025, the portfolio included 41% first lien secured debt and 29% preferred and common equity [4]. Investment Income and Expenses - Investment income for the three months ended March 31, 2025, was primarily derived from first lien secured debt, totaling $22.1 million [13]. - Total expenses for the quarter were $19.2 million, a decrease from $21.7 million in the same quarter of the previous year [14]. - The decrease in expenses was attributed to lower interest and debt-related expenses [14]. Realized and Unrealized Gains - Net realized losses for the quarter were $(27.7) million, compared to $(31.0) million in the same quarter of the previous year [17]. - The net change in unrealized appreciation on investments was $27.1 million for the quarter [18]. Liquidity and Capital Resources - As of March 31, 2025, the company had $314.5 million in outstanding borrowings under the Truist Credit Facility, with a weighted average interest rate of 6.7% [22]. - Cash and cash equivalents available for investing and corporate purposes were $32.6 million [23]. Distributions - The company declared distributions of $0.24 per share for the quarter, totaling $15.7 million, compared to $0.21 per share in the same quarter of the previous year [27].

Company Overview - PennantPark Investment Corporation is a business development company that primarily invests in U.S. middle-market private companies through various forms of debt and equity investments [3] - The company is managed by PennantPark Investment Advisers, LLC, which has been operational since 2007 and manages $9.8 billion of investable capital [4] Upcoming Financial Reporting - The company will report its financial results for the second fiscal quarter ended March 31, 2025, on May 12, 2025, after the close of financial markets [1] - A conference call to discuss these results will be held on May 13, 2025, at 12:00 p.m. Eastern Time, with access details provided for interested parties [2]

Group 1 - PennantPark Investment (NYSE: PNNT) operates as a business development company focused on generating attractive total returns through a diverse portfolio of debt investments [1] - PNNT distinguishes itself from other business development companies (BDCs) by its unique investment strategies [1] Group 2 - The company aims to create a hybrid investment system that combines growth and income, allowing for total returns comparable to traditional index funds like the S&P [1]

Financial Data and Key Metrics Changes - For the quarter ended December 31, GAAP and core net investment income was $0.20 per share, which is $0.04 below the quarterly dividend [7][25] - GAAP and adjusted NAV increased by 0.1% to $7.57 per share from $7.56 per share [9][27] - The company has $65 million or $0.99 per share of undistributed spillover income [8] Business Line Data and Key Metrics Changes - The portfolio totaled $1.3 billion, with $296 million invested in 12 new and 61 existing portfolio companies at a weighted average yield of 10.6% [9][10] - The weighted average debt-to-EBITDA for new portfolio companies was 4x, and the weighted average interest coverage was 2.2x [10] - The joint venture (JV) portfolio grew to $1.3 billion, with an 18.4% return on invested capital over the last 12 months [12][13] Market Data and Key Metrics Changes - The market yield on first lien term loans appears to have stabilized in the SOFR plus 500 to 550 range [11] - The credit quality of the investment portfolio remains strong, with 2 nonaccruals representing 4.3% of the portfolio cost and 1.5% of market value [14][28] Company Strategy and Development Direction - The company focuses on capital preservation in the U.S. and believes that the core middle market provides attractive investment opportunities [15] - The company has a long-term track record of financing growing middle market companies in five key sectors: business services, consumer, government services and defense, health care, and software technology [16] - The company aims to generate attractive risk-adjusted returns through income while preserving capital [23] Management's Comments on Operating Environment and Future Outlook - Management believes that the current vintage of core middle market loans is excellent, with lower leverage, higher spreads, and tighter covenants compared to the upper middle market [11][20] - The company anticipates that 2025 will provide opportunities for equity rotation and monetization of investments [47][64] - Management is optimistic about the growth of the JV and its contribution to future earnings momentum [13][24] Other Important Information - The company has invested over $563 million in equity co-investments since inception, generating an IRR of 26% [21] - The company has a diversified portfolio with 158 companies across 35 different industries [27] Q&A Session Summary Question: Any commentary about the level of capacity or competition in the core middle market? - Management noted that larger players have exited the core middle market, leaving only a handful of peers, which stabilizes spreads [34][35] Question: What is the appetite for equity co-investments? - Management stated that equity co-investments are evaluated on a case-by-case basis, aiming to capture growth while maintaining a safe loan structure [38][40] Question: How will net investment activity trend in the first half of the year? - Management indicated that PNNT is currently optimized and expects to return to a debt-to-equity ratio of 1.25% to 1.3% in the long term [42] Question: What is the target level for spillover income? - Management emphasized the importance of market opportunities and equity rotation, stating that they aim to maintain a steady dividend stream [46][50] Question: What are the prospects for restructuring the investment in Pragmatic Institute? - Management anticipates some form of restructuring during the current quarter, with potential debt conversion [52] Question: What areas does the company want to ramp up exposure in the portfolio? - Management highlighted health care and government services as key areas, focusing on companies that drive cost containment [56][58] Question: What is the timing and magnitude of monetizing equity investments? - Management aims to reduce equity investments by half over time, with hopes for increased M&A activity in 2025 [64] Question: Are there any notable credit events since the end of the quarter? - Management mentioned that Zips Car Wash filed for prepackaged bankruptcy, which is not material to the portfolio [128]

Core Insights - PennantPark reported revenue of $34.21 million for the quarter ended December 2024, reflecting a year-over-year decline of 0.4% and an EPS of $0.20, down from $0.24 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $35.17 million by 2.74%, while the EPS met the consensus estimate [1] Financial Performance Metrics - Investment income from non-controlled, non-affiliated investments was $0.58 million, below the average estimate of $0.86 million from three analysts [4] - Dividend income from controlled, affiliated investments was $4.85 million, compared to the two-analyst average estimate of $5.27 million [4] - Dividend income from non-controlled, non-affiliated investments was $0.51 million, lower than the average estimate of $0.62 million from two analysts [4] Stock Performance - Over the past month, shares of PennantPark have returned +1.1%, while the Zacks S&P 500 composite increased by +2.1% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Earnings Performance - PennantPark reported quarterly earnings of $0.20 per share, matching the Zacks Consensus Estimate, but down from $0.24 per share a year ago [1] - The company posted revenues of $34.21 million for the quarter, missing the Zacks Consensus Estimate by 2.74%, compared to $34.34 million in the same quarter last year [2] Market Comparison - Since the beginning of the year, PennantPark shares have increased by approximately 1.6%, while the S&P 500 has gained 2.5% [3] Future Outlook - The earnings outlook for PennantPark is uncertain, with current consensus EPS estimates at $0.21 for the upcoming quarter and $0.83 for the current fiscal year [7] - The estimate revisions trend for PennantPark is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Financial - SBIC & Commercial Industry, to which PennantPark belongs, is currently in the top 25% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Portfolio Overview - As of December 31, 2024, the portfolio totaled $1,298.1 million, with 44% in first lien secured debt and a weighted average yield on interest-bearing debt investments of 12.0%[231] - As of September 30, 2024, the portfolio totaled $1,328.1 million, with 50% in first lien secured debt and a weighted average yield on interest-bearing debt investments of 12.3%[232] - As of December 31, 2024, PennantPark Senior Loan Fund's portfolio totaled $1,275.1 million, consisting of 112 companies with a weighted average yield of 10.7%[236] - The overall portfolio had net unrealized appreciation of $13.6 million as of December 31, 2024[231] - The company’s portfolio primarily consists of illiquid securities, with most investments classified as Level 3 in the fair value hierarchy[246] Investment Activity - For the three months ended December 31, 2024, the company invested $295.7 million in 12 new and 61 existing portfolio companies, with sales and repayments totaling $353.7 million[233] - For the three months ended December 31, 2023, the company invested $231.1 million in 12 new and 32 existing portfolio companies, with sales and repayments totaling $71.0 million[234] - For the three months ended December 31, 2024, PennantPark Senior Loan Fund invested $353.8 million in 15 new and 43 existing portfolio companies at a weighted average yield of 10.5%[237] Financial Performance - For the three months ended December 31, 2024, investment income was $34.2 million, a slight decrease from $34.3 million in the same period of 2023, primarily due to changes in the portfolio and investment yields[266] - Net investment income for the three months ended December 31, 2024, was $13.0 million, or $0.20 per share, compared to $15.7 million, or $0.24 per share in 2023, reflecting an increase in interest expense[268] - Total expenses for the three months ended December 31, 2024, were $21.2 million, up from $18.7 million in 2023, mainly due to an increase in debt-related interest and expenses[267] - Total investment income for the three months ended December 31, 2024, was $33.476 million, an increase of 22.4% from $27.247 million in the same period of 2023[307] - Net investment income for the three months ended December 31, 2024, was $9.316 million, compared to $7.998 million for the same period in 2023, reflecting a growth of 16.4%[307] Tax and Valuation - The company recognized a provision for taxes on net investment income of $0.7 million for the three months ended December 31, 2024, compared to $0.4 million for the same period in 2023[258] - The company has adopted ASC 825-10 for the Truist Credit Facility, allowing it to report selected financial assets and liabilities at fair value, which mitigates volatility in earnings[249] - The board of directors utilizes a multi-step valuation process for illiquid securities, involving independent valuation firms and an audit committee review[243] - The company has not elected to designate the Investment Adviser as the valuation designee under Rule 2a-5, but has revised its valuation policies to comply with the rule[247] Debt and Liquidity - The Truist Credit Facility had outstanding borrowings of $464.5 million as of December 31, 2024, with a weighted average interest rate of 6.8%[277] - Cash and cash equivalents as of December 31, 2024, were $55.9 million, an increase from $49.9 million in the previous quarter, indicating improved liquidity[287] - Operating activities provided cash of $18.7 million for the three months ended December 31, 2024, contrasting with cash used of $155.1 million in the same period of 2023[288] - Cash and cash equivalents increased to $112.691 million as of December 31, 2024, from $36.595 million as of September 30, 2024, showing a significant increase of 208.5%[305] Distributions and Equity - The company declared distributions of $0.24 per share for a total of $15.7 million during the three months ended December 31, 2024, compared to $0.21 per share totaling $13.7 million in the same period of 2023, marking a 14.6% increase[310] - Members' equity increased to $133.234 million as of December 31, 2024, compared to $112.271 million as of September 30, 2024, indicating a growth of 18.7%[305] - The company maintains an "opt out" dividend reinvestment plan for common stockholders, allowing automatic reinvestment of cash distributions unless stockholders opt out[312] Market Conditions and Risks - The company does not accrue PIK interest if the portfolio company valuation indicates that such interest is not collectible[251] - The company’s net investment income is dependent on the difference between borrowing rates and investment rates, with no assurance that significant changes in market interest rates will not adversely affect net investment income[322] - A hypothetical 1% increase in interest rates would result in a $3,033 thousand increase in net interest income, while a 1% decrease would lead to a $3,033 thousand decrease[321] - The company has not engaged in interest rate hedging activities or foreign currency derivatives hedging activities during the periods covered by the report[323] Sector Focus - The company holds a significant position in the healthcare sector, with multiple investments such as Emergency Care Partners, LLC and Bioderm, Inc., both yielding above 10%[300] - The total cost of investments in the healthcare, education, and childcare sector exceeds $100 million, showcasing a strategic focus on this growing market[300] - The company has a significant investment in the aerospace and defense sector, with multiple entries showing coupon rates above 10%[302] - Overall, PSLF's investment strategy appears to focus on high-yield opportunities across various industries, with a notable emphasis on healthcare and media sectors[302]

EXHIBIT 99.1 PennantPark Investment Corporation Announces Financial Results for the Quarter Ended December 31, 2024 MIAMI, Feb. 10, 2025 (GLOBE NEWSWIRE) -- PennantPark Investment Corporation (NYSE: PNNT) announced today its financial results for the first quarter ended December 31, 2024. CONFERENCE CALL AT 12:00 P.M. EST ON FEBRUARY 11, 2025 PennantPark Investment Corporation ("we," "our," "us" or the "Company") will also host a conference call at 12:00 p.m. (Eastern Time) on Tuesday, February 11, 2025 to ...