ミ PennantPark 03/31/2021 N E W Y O R K • C H I C A G O • H O U S T O N • L O S A N G E L E S Forward-looking Statements and Risk Factors This presentation may include forward-looking statements. These forward-looking statements include comments with respect to our objectives and strategies and results of our operations. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021 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: 814-00736 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) PENNANTPARK INVESTMENT CORPORATION (Exact name of registrant as specified in its charter) MARYLAND 20-8250744 (State or o ...

PennantPark Investment Corporation (NYSE:PNNT) Q1 2021 Earnings Conference Call February 10, 2021 1:00 PM ET Company Participants Art Penn - Chairman and Chief Executive Officer Aviv Efrat - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Casey Alexander - Compass Point Robert Dodd - Raymond James Ryan Lynch - KBW Kyle Joseph - Jefferies Melissa Wedel - JPMorgan Jim Altschul - Aviation Advisory Service, Inc. Operator Good afternoon and welcome to the PennantPark Investment C ...

PART I. CONSOLIDATED FINANCIAL INFORMATION [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 Investment Corporation for the quarter ended December 31, 2020 [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets increased to $1.15 billion, liabilities decreased, boosting net assets to $588.8 million and NAV per share to $8.78 Consolidated Assets and Liabilities (unaudited) | Financial Metric | Dec 31, 2020 ($) | Sep 30, 2020 ($) | | :--- | :--- | :--- | | Total Investments (at fair value) | 1,127,091,065 | 1,081,771,418 | | Total Assets | 1,153,835,369 | 1,114,352,881 | | Total Liabilities | 565,038,179 | 588,644,029 | | Total Net Assets | 588,797,190 | 525,708,852 | | Net Asset Value (NAV) per share | 8.78 | 7.84 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Investment income decreased to $18.7 million, but a $62.8 million gain led to a $71.1 million net increase in net assets from operations Consolidated Operations Highlights (unaudited) | Metric | Three Months Ended Dec 31, 2020 ($) | Three Months Ended Dec 31, 2019 ($) | | :--- | :--- | :--- | | Total Investment Income | 18,732,460 | 26,003,765 | | Net Expenses | 10,417,062 | 15,818,605 | | Net Investment Income | 8,315,398 | 10,185,160 | | Net Realized and Unrealized Gain | 62,818,353 | 9,017,350 | | Net Increase in Net Assets from Operations | 71,133,751 | 19,202,510 | | Net Increase in Net Assets per Share | 1.06 | 0.29 | [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets increased by $63.1 million, driven by a $71.1 million net increase from operations, offset by $8.0 million in distributions Changes in Net Assets (unaudited) | Metric | Three Months Ended Dec 31, 2020 ($) | Three Months Ended Dec 31, 2019 ($) | | :--- | :--- | :--- | | Net Assets, Beginning of Period | 525,708,852 | 581,905,668 | | Net Increase from Operations | 71,133,751 | 19,202,510 | | Distributions to Stockholders | (8,045,413) | (12,068,119) | | Net Increase in Net Assets | 63,088,338 | 7,134,391 | | Net Assets, End of Period | 588,797,190 | 589,040,059 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was $35.0 million, reversing a prior-year outflow, resulting in a $5.7 million net decrease in cash Cash Flow Summary (unaudited) | Cash Flow Activity | Three Months Ended Dec 31, 2020 ($) | Three Months Ended Dec 31, 2019 ($) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 35,038,357 | (71,322,809) | | Net Cash from Financing Activities | (40,752,513) | 43,844,381 | | Net Decrease in Cash | (5,714,156) | (27,478,428) | | Cash, End of Period | 20,157,299 | 32,107,649 | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments) The $1.127 billion portfolio was primarily in First Lien Secured Debt (65.4%) and Common Equity (27.2%), with top concentrations in Healthcare, Education, and Childcare Portfolio Composition by Fair Value (Dec 31, 2020) | Investment Type | Percentage of Portfolio | | :--- | :--- | | First Lien Secured Debt | 65.4% | | Second Lien Secured Debt | 22.3% | | Subordinated Debt/Corporate Notes | 8.9% | | Preferred Equity/Partnership Interests | 3.6% | | Common Equity/Partnership Interests/Warrants | 27.2% | Top Industry Concentrations by Fair Value (Dec 31, 2020) | Industry Classification | Percentage of Portfolio | | :--- | :--- | | Healthcare, Education and Childcare | 23% | | Energy and Utilities | 7% | | Environmental Services | 7% | | Consumer Products | 6% | | Distribution | 5% | [Notes to Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail BDC organization, accounting policies, the PSLF joint venture, fee waivers, debt facilities, and a 232% asset coverage ratio - The company is a closed-end, externally managed BDC investing primarily in U.S. middle-market companies and operates a licensed SBIC subsidiary, SBIC II[40](index=40&type=chunk)[41](index=41&type=chunk) - On July 31, 2020, the company formed PennantPark Senior Loan Fund, LLC (PSLF), an unconsolidated joint venture with Pantheon, to invest in middle-market corporate debt securities[43](index=43&type=chunk) - The Investment Adviser has voluntarily agreed to waive performance-based incentive fees for the period of April 1, 2020, to March 31, 2021[68](index=68&type=chunk) - The company's asset coverage ratio was **232%** as of December 31, 2020, well above the required **150%** minimum[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, portfolio activity, and operations, noting portfolio value growth, COVID-19 impacts, and strong liquidity [Overview](index=33&type=section&id=Overview) The company is a BDC investing $10 million to $50 million in U.S. middle-market companies for income and capital appreciation - The company's primary investment objective is to generate both current income and capital appreciation by investing in U.S. middle-market companies[156](index=156&type=chunk) - Investment targets are typically companies with annual revenues between **$50 million and $1 billion**, with average investment sizes of **$10 million to $50 million**[157](index=157&type=chunk) [COVID-19 Developments](index=35&type=section&id=COVID-19%20Developments) The pandemic creates material uncertainty, adversely affecting portfolio companies and reducing variable-rate interest income, despite operational stability - The COVID-19 pandemic has caused financial distress for some portfolio companies, which may reduce interest and dividend income and require follow-on investments or restructuring[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - Reduced interest rates, such as LIBOR, have decreased gross investment income from the **92%** of the debt portfolio that is variable-rate[169](index=169&type=chunk) [Portfolio and Investment Activity](index=36&type=section&id=Portfolio%20and%20Investment%20Activity) The portfolio grew to $1.127 billion across 81 companies with a 9.3% debt yield, with $68.2 million invested and $102.6 million received Portfolio Summary | Metric | Dec 31, 2020 | Sep 30, 2020 | | :--- | :--- | :--- | | Total Portfolio Value (million $) | 1,127.1 | 1,081.8 | | Number of Portfolio Companies | 81 | 80 | | Weighted Avg. Yield on Debt | 9.3% | 8.9% | | % Variable-Rate Debt | 92% | 93% | | Companies on Non-Accrual | 0 | 2 | - For the three months ended Dec 31, 2020, the company invested **$68.2 million** and received **$102.6 million** from sales and repayments[176](index=176&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Investment income fell to $18.7 million, but net assets from operations significantly increased to $71.1 million due to $93.5 million in unrealized appreciation Quarterly Results of Operations Comparison | Metric | Q4 2020 (million $) | Q4 2019 (million $) | | :--- | :--- | :--- | | Investment Income | 18.7 | 26.0 | | Net Expenses | 10.4 | 15.8 | | Net Investment Income | 8.3 | 10.2 | | Net Realized Loss | (17.6) | (12.0) | | Net Unrealized Appreciation | 93.5 | 23.6 | | Net Change in Net Assets | 71.1 | 19.2 | - The increase in net assets was primarily due to unrealized gains in the equity co-investment program, including ITC Rumba, LLC (Cano Health, LLC)[204](index=204&type=chunk)[205](index=205&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is strong with $355.5 million outstanding on the Truist Credit Facility, $118.5 million in SBA debentures, and a 232% asset coverage ratio - The company's asset coverage ratio was **232%** as of Dec 31, 2020, exceeding the **150%** minimum requirement[207](index=207&type=chunk) Debt Outstanding as of Dec 31, 2020 | Debt Instrument | Principal Amount (million $) | | :--- | :--- | | Truist Credit Facility | 355.5 | | SBA Debentures | 118.5 | | 5.50% Notes due 2024 | 86.3 | | **Total Debt** | **560.3** | - As of December 31, 2020, the company had **$119.5 million** of unused borrowing capacity under the Truist Credit Facility and **$20.2 million** in cash and cash equivalents[210](index=210&type=chunk)[218](index=218&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk, with 92% variable-rate debt; a 1% rate increase would decrease net interest income by $2.5 million annually - The company is subject to interest rate risk, with **92%** of its debt portfolio being variable-rate, typically based on LIBOR[246](index=246&type=chunk) Annualized Impact of Hypothetical Interest Rate Changes | Change In Interest Rates | Change In Net Interest Income (thousand $) | Change In Net Interest Income Per Share ($) | | :--- | :--- | :--- | | Down 1% | 580 | 0.01 | | Up 1% | (2,459) | (0.04) | | Up 2% | 879 | 0.01 | | Up 3% | 4,217 | 0.06 | [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of December 31, 2020, with no material changes to internal financial reporting controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[250](index=250&type=chunk)[252](index=252&type=chunk) - No material changes were made to internal controls over financial reporting during the quarter[253](index=253&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company, its Investment Adviser, and Administrator are not subject to any material legal proceedings, nor are any threatened - There are no material legal proceedings against the company, its Investment Adviser, or its Administrator[254](index=254&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) Increased leverage due to a reduced 150% asset coverage ratio magnifies potential gains and losses, requiring capital for growth - A key risk is the increased leverage permitted since February 2019, when the minimum asset coverage ratio was reduced from **200% to 150%** This allows the company to potentially increase its debt-to-equity ratio from **1-to-1 to 2-to-1**[256](index=256&type=chunk)[258](index=258&type=chunk) - Increased leverage magnifies the potential for both loss and gain, and if asset values decline, the impact on net asset value will be greater[260](index=260&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the three months ended December 31, 2020 - No unregistered sales of equity securities occurred during the quarter[262](index=262&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - None[263](index=263&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) Exhibits filed include CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 - Exhibits filed include CEO and CFO certifications under Rule 13a-14 and Section 906 of the Sarbanes-Oxley Act[266](index=266&type=chunk)

PennantPark Investment Corporation (NYSE:PNNT) Q4 2020 Results Conference Call November 20, 2020 10:00 AM ET Company Participants Art Penn - Chairman and CEO Aviv Efrat - CFO Conference Call Participants Robert Dodd - Raymond James Casey Alexander - Compass Point Mickey Schleien - Ladenburg Ryan Lynch - KBW Kyle Joseph - Jefferies Rick Shane - JP Morgan Kevin Fultz - JMP Securities Operator Good morning, and welcome to the PennantPark Investment CorporationÂ's Fourth Fiscal Quarter 2020 Earnings Conference ...

PennantPark Investment Corporation (NYSE:PNNT) Q3 2020 Earnings Conference Call August 6, 2020 12:00 PM ET Company Participants Art Penn - Chairman and Chief Executive Officer Aviv Efrat - Chief Financial Officer Conference Call Participants Kyle Joseph - Jefferies Robert Dodd - Raymond James Paul Johnson - Keefe, Bruyette & Woods Rick Shane - JPMorgan Operator Welcome to the PennantPark Investment CorporationÂ's Third Fiscal Quarter 2020 Earnings Conference Call. TodayÂ's conference is being recorded. At t ...

ミ PennantPark 06/30/2020 N E W Y O R K • C H I C A G O • H O U S T O N • L O S A N G E L E S Forward-looking Statements and Risk Factors This presentation may include forward-looking statements. These forward-looking statements include comments with respect to our objectives and strategies and results of our operations. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may ...

PennantPark Investment (NYSE:PNNT) Q2 2020 Earnings Conference Call May 12, 2020 12:00 PM ET Company Participants Art Penn – Chairman and Chief Executive Officer Aviv Efrat – Chief Financial Officer Conference Call Participants Mickey Schleien – Ladenburg Thallman Kyle Joseph – Jefferies Robert Dodd – Raymond James Rick Shane – JPMorgan Ryan Lynch – KBW Casey Alexander – Compass Point Operator Welcome to the PennantPark Investment Corporation's Second Fiscal Quarter 2020 Earnings Conference. Today's confere ...

ミ PennantPark 03/31/2020 N E W Y O R K • C H I C A G O • H O U S T O N • L O S A N G E L E S Forward-looking Statements and Risk Factors This presentation may include forward-looking statements. These forward-looking statements include comments with respect to our objectives and strategies and results of our operations. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may ...

PennantPark Investment (NYSE:PNNT) Q1 2020 Earnings Conference Call February 7, 2020 10:00 AM ET Company Participants Art Penn - Chairman and Chief Executive Officer Aviv Efrat - Chief Financial Officer and Treasurer Conference Call Participants Kyle Joseph - Jeffries Robert Dodd - Raymond James Mickey Schleien - Ladenburg Thalmann Ryan Lynch - KBW Rick Shane - JPMorgan Casey Alexander - Compass Point Research David Miyazaki - Confluence Investment Management Operator Good morning and welcome to the Pennant ...