SLR Investment (SLRC)

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SLR Investment (SLRC) - 2025 Q1 - Earnings Call Transcript
2025-05-08 15:00
Financial Data and Key Metrics Changes - SLR Investment Corp reported net investment income of $0.41 per share for Q1 2025, consistent with the base dividend of $0.41 per share, reflecting a return on equity of approximately 9% [6][17] - The company's net asset value at the end of the quarter was $18.16 per share, a slight decrease of $0.04 from $18.20 per share at the end of Q4 2024 [14] - Gross investment income for the three months ended March 31 totaled $53.2 million, down from $55.6 million in the previous quarter [16] Business Line Data and Key Metrics Changes - The comprehensive portfolio totaled $3.1 billion at quarter end, with $361 million in new investments and $391 million in repayments during Q1 [7][14] - Approximately 80% of the portfolio was derived from specialty finance investments, with cash flow loans now representing less than 20%, the lowest level in three years [7][8] - The yield on the comprehensive portfolio increased to 12.2%, up from 12.1% in the previous quarter and 11.8% in Q1 2024 [8] Market Data and Key Metrics Changes - The current environment is marked by policy volatility and economic uncertainty, with expectations for elevated inflation and slower global growth [9][10] - The company has over $800 million of available capital to deploy, positioning it to take advantage of both durable economic conditions and potential economic softening [12] Company Strategy and Development Direction - The company has shifted its portfolio mix towards asset-based specialty finance strategies, providing greater downside protection from underlying collateral [7] - SLR's multi-strategy investment approach aims to deliver consistent returns and protect capital across market cycles, with a focus on high-quality collateral [19] - The company is actively monitoring portfolio companies for impacts from tariffs and is focused on domestic service-oriented businesses [10][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties and capitalizing on volatility from widening credit spreads [5] - The company believes its disciplined approach and strong credit profile will allow it to withstand persistent inflationary pressures and high interest rates [11] - Management highlighted the importance of monitoring trends in receivables and inventory to manage risks effectively [53] Other Important Information - The company declared a Q2 2025 quarterly distribution of $0.41 per share, payable on June 27, 2025 [18] - SLR Investment Corp is rated investment grade by Fitch, Moody's, and DBRS, with no near-term refinancing obligations [15] Q&A Session Summary Question: Follow-up on pipeline weighting towards ABL and equipment finance opportunities - Management indicated that the pipeline is approximately 75-80% weighted towards ABL, covering various industries [40][41] Question: Description of recent attractive cash flow lending opportunities - Management noted that attractive opportunities involve financing tuck-in acquisitions of seasoned platforms, allowing for short duration and potential re-underwriting [44][46] Question: Contribution from Kingsbridge in the quarter - Management confirmed that Kingsbridge's performance included some one-time gains but is expected to continue performing well [48] Question: Estimate of tariff exposure in the portfolio - Management stated that less than 1% of the portfolio has direct exposure to tariffs, primarily due to the focus on domestic service-based businesses [51][52] Question: Yield increase in the equipment finance business - Management explained that the yield increase is due to borrowers extending leases and some one-time gains from asset sales [56][57]
SLR Investment (SLRC) Meets Q1 Earnings Estimates
ZACKS· 2025-05-07 22:45
分组1 - SLR Investment (SLRC) reported quarterly earnings of $0.41 per share, matching the Zacks Consensus Estimate, but down from $0.44 per share a year ago [1] - The company posted revenues of $53.18 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.56% and down from $58.1 million year-over-year [2] - SLR Investment shares have declined about 4% since the beginning of the year, slightly outperforming the S&P 500's decline of 4.7% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $53.65 million, and for the current fiscal year, it is $1.66 on revenues of $215.56 million [7] - The Zacks Industry Rank for Financial - SBIC & Commercial Industry is in the bottom 37% of over 250 Zacks industries, indicating potential challenges for stock performance [8]
SLR Investment (SLRC) - 2025 Q1 - Quarterly Results
2025-05-07 20:45
[Q1 2025 Financial Results and Company Overview](index=1&type=section&id=SLR%20Investment%20Corp.%20Announces%20Quarter%20Ended%20March%2031%2C%202025%20Financial%20Results) SLR Investment Corp. reported Q1 2025 Net Investment Income of $0.41 per share, with a slight decrease in NAV, while management expressed confidence in the portfolio and capital position [Financial Highlights and CEO Commentary](index=1&type=section&id=FINANCIAL%20HIGHLIGHTS%20FOR%20THE%20QUARTER%20ENDED%20MARCH%2031%2C%202025%3A) SLRC's Q1 2025 financial highlights include Net Investment Income matching distributions, a slight NAV decrease, and management's positive outlook on portfolio quality and market opportunities | Metric | Value | Comparison | | :--- | :--- | :--- | | **Net Investment Income (NII)** | $22.1 million ($0.41 per share) | - | | **Quarterly Distribution** | $0.41 per share | Payable June 27, 2025 | | **Net Asset Value (NAV)** | $18.16 per share | vs. $18.20 at Dec 31, 2024 | | **Net Increase in Net Assets** | $19.9 million ($0.37 per share) | - | - Management believes the portfolio is well-positioned, being heavily collateralized by working capital assets and focused on domestic services businesses, which provides resilience against uncertain tariff impacts[3](index=3&type=chunk) - The company observes a growing pipeline of asset-based lending opportunities due to market dislocation and the retreat of traditional banks, with over **$800 million** in available capital to leverage this trend[3](index=3&type=chunk) [Portfolio Analysis](index=1&type=section&id=Comprehensive%20Investment%20Portfolio) The comprehensive investment portfolio demonstrates diversification, strong asset quality, and strategic growth in asset-based lending [Comprehensive Portfolio Activity](index=1&type=section&id=Portfolio%20Activity) Q1 2025 saw total originations of $361.3 million and repayments of $390.6 million, resulting in a net portfolio decrease, with asset-based lending as the only growth category | Asset Class | Originations ($ million) | Repayments / Amortization ($ million) | Net Portfolio Activity ($ million) | | :--- | :--- | :--- | :--- | | Sponsor Finance | $44.8 | $73.0 | ($28.2) | | Asset-based Lending | $163.8 | $98.9 | $64.9 | | Equipment Finance | $128.1 | $173.5 | ($45.4) | | Life Science Finance | $24.6 | $45.2 | ($20.6) | | **Total** | **$361.3** | **$390.6** | **($29.3)** | [Comprehensive Portfolio Composition](index=2&type=section&id=Comprehensive%20Investment%20Portfolio%20Composition) The $3.1 billion portfolio is highly diversified across 940 issuers, with 98.2% in senior secured loans, predominantly first lien, and asset-based and equipment financings as largest segments - The portfolio is diversified across approximately **940** unique issuers in over **105** industries, with an average exposure of **$3.2 million (0.1%)** per issuer[10](index=10&type=chunk) | Asset Class | Amount ($ million) | % of Portfolio | Weighted Avg. Asset Yield | | :--- | :--- | :--- | :--- | | Cash Flow Loans (Sponsor Finance) | $588.0 | 19.3% | 10.4% | | Asset-Based Loans | $1,121.3 | 36.7% | 13.8% | | Equipment Financings | $1,102.6 | 36.1% | 11.5% | | Life Science Loans | $186.8 | 6.1% | 12.5% | | **Total Senior Secured** | **$2,998.7** | **98.2%** | **12.2%** | | Equity and Equity-like Securities | $54.2 | 1.8% | N/A | | **Total Comprehensive Portfolio** | **$3,052.9** | **100.0%** | - | - First lien senior secured loans make up **96.4%** of the Comprehensive Investment Portfolio, underscoring a conservative credit profile[10](index=10&type=chunk)[11](index=11&type=chunk) [Asset Quality and Income Contribution](index=3&type=section&id=Asset%20Quality) Asset quality remains robust with minimal non-accruals and a high concentration in top risk categories, while asset-based lending significantly contributed to Q1 2025 investment income - As of March 31, 2025, only **0.4%** of the portfolio at fair value was on non-accrual status[15](index=15&type=chunk) Internal Investment Rating (as of March 31, 2025) | Rating | Investments at Fair Value ($ million) | % of Total Portfolio | | :--- | :--- | :--- | | 1 (Least Risk) | $622.3 | 31.0% | | 2 | $1,334.9 | 66.6% | | 3 | $39.4 | 2.0% | | 4 (Most Risk) | $7.8 | 0.4% | Investment Income Contribution by Asset Class (Q1 2025) | Asset Class | Income ($ million) | % Contribution | | :--- | :--- | :--- | | Sponsor Finance | $17.0 | 32.0% | | Asset-based Lending | $19.5 | 36.7% | | Equipment Finance | $9.7 | 18.2% | | Life Science Finance | $7.0 | 13.1% | | **Total** | **$53.2** | **100.0%** | [SLR Senior Lending Program (SSLP)](index=3&type=section&id=SLR%20Senior%20Lending%20Program%20LLC%20(SSLP)) The SSLP, a 50/50 joint venture, held a $165.6 million portfolio of senior secured loans, generating a stable 15.7% annualized yield for SLRC in Q1 2025 - At quarter-end, the SSLP's portfolio consisted of **$165.6 million** at fair value, invested in **31** different borrowers[17](index=17&type=chunk) - In Q1 2025, SLRC earned **$1.9 million** from its SSLP investment, representing an annualized yield of **15.7%** on cost, consistent with Q4 2024[18](index=18&type=chunk) [Financial Performance](index=4&type=section&id=SLR%20Investment%20Corp.'s%20Results%20of%20Operations%20Quarter%20Over%20Quarter) SLRC's Q1 2025 financial performance reflects a decrease in net investment income due to a smaller portfolio and lower index rates, partially offset by reduced expenses [Quarter-over-Quarter Results of Operations](index=4&type=section&id=Results%20of%20Operations) Q1 2025 net investment income decreased to $22.1 million ($0.41/share) from $23.9 million ($0.44/share) in Q1 2024, driven by lower gross investment income and partially offset by reduced interest expenses | Metric (in millions, except per share) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Investment Income | $53.2 | $58.1 | ($4.9) | | Net Expenses | $31.1 | $34.2 | ($3.1) | | **Net Investment Income** | **$22.1** | **$23.9** | **($1.8)** | | NII per Share | $0.41 | $0.44 | ($0.03) | | Net Realized/Unrealized Gain (Loss) | ($2.2) | $4.0 | ($6.2) | | **Net Increase in Net Assets** | **$19.9** | **$27.9** | **($8.0)** | | Earnings per Share | $0.37 | $0.51 | ($0.14) | - The year-over-year decrease in gross investment income was primarily due to a smaller income-producing portfolio and a decrease in index rates[19](index=19&type=chunk) - The decrease in expenses was mainly due to lower interest expense resulting from reduced average borrowings and lower index rates[20](index=20&type=chunk) [Capital Structure and Liquidity](index=4&type=section&id=Capital%20and%20Liquidity) SLRC maintains a healthy capital structure with a net debt-to-equity ratio within target, enhanced liquidity from recent unsecured note issuance, and no near-term debt maturities [Capital and Liquidity Overview](index=4&type=section&id=Capital%20and%20Liquidity%20Overview) As of March 31, 2025, SLRC's net debt-to-equity ratio was 1.04x, within target, supported by a recent $50.0 million unsecured note issuance and over $800 million in available capital - The company's net debt-to-equity ratio was **1.04x** as of March 31, 2025, compared to **1.16x** a year prior, and is within the target range of **0.9x to 1.25x**[27](index=27&type=chunk) - In February 2025, the company issued **$50.0 million** of **6.14%** unsecured notes due 2028, bringing total unsecured notes outstanding to **$359 million**, with the next maturity not until December 2026[26](index=26&type=chunk) - Including borrowing capacity at its specialty finance companies, SLRC had over **$800 million** of available capital as of March 31, 2025[28](index=28&type=chunk) [Subsequent Events](index=5&type=section&id=Subsequent%20Events) Subsequent to the quarter's end, the Board of Directors declared a quarterly distribution, maintaining consistency for shareholders [Dividend Declaration](index=5&type=section&id=Dividend%20Declaration) On May 7, 2025, the Board of Directors declared a quarterly distribution of $0.41 per share, payable in June 2025 - On May 7, 2025, the Board declared a quarterly distribution of **$0.41 per share**, payable on June 27, 2025, to shareholders of record as of June 13, 2025[30](index=30&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=SLR%20INVESTMENT%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20ASSETS%20AND%20LIABILITIES) The consolidated financial statements provide a detailed overview of SLRC's assets, liabilities, and operational results for the quarter ended March 31, 2025 [Consolidated Statements of Assets and Liabilities](index=5&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of March 31, 2025, total assets increased to $2.50 billion, total liabilities to $1.51 billion, resulting in a slight decrease in total net assets to $990.5 million and NAV per share of $18.16 Balance Sheet Highlights (in thousands, except per share) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Investments at Fair Value | $2,004,399 | $2,005,634 | | Total Assets | $2,502,972 | $2,449,417 | | Total Liabilities | $1,512,487 | $1,456,491 | | **Total Net Assets** | **$990,485** | **$992,926** | | **Net Asset Value Per Share** | **$18.16** | **$18.20** | [Consolidated Statements of Operations](index=6&type=section&id=SLR%20INVESTMENT%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q1 2025, SLRC reported $53.2 million in total investment income, $22.1 million in net investment income, and a net increase in net assets of $19.9 million ($0.37 per share) after accounting for losses Statement of Operations Highlights (in thousands, except per share) | Account | Three months ended Mar 31, 2025 | Three months ended Mar 31, 2024 | | :--- | :--- | :--- | | Total Investment Income | $53,178 | $58,099 | | Net Expenses | $31,073 | $34,247 | | **Net Investment Income** | **$22,105** | **$23,852** | | Net Realized & Unrealized Gain (Loss) | ($2,179) | $4,019 | | **Net Increase in Net Assets** | **$19,926** | **$27,871** | | **Earnings Per Share** | **$0.37** | **$0.51** |
SLR Investment (SLRC) - 2025 Q1 - Quarterly Report
2025-05-07 20:06
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 2025 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Maryland 26-1381340 (State of Incorporation) (I.R.S. Employer 500 Park Avenue New York, N.Y. 10022 (Address of principal executive offices) (Zip Code) Identification No.) (212) 993-1670 (Registr ...
SLR Investment Corp. Announces Quarter Ended March 31, 2025 Financial Results
Globenewswire· 2025-05-07 20:02
Core Insights - SLR Investment Corp. reported a net investment income of $22.1 million, or $0.41 per share, for Q1 2025, with a declared quarterly distribution of $0.41 per share [2][31] - The net asset value (NAV) as of March 31, 2025, was $18.16 per share, slightly down from $18.20 per share at the end of 2024 [2][36] Financial Performance - The company experienced a decrease in gross investment income from $58.1 million in Q1 2024 to $53.2 million in Q1 2025, attributed to a smaller income-producing investment portfolio and lower index rates [20] - Net expenses decreased from $34.2 million in Q1 2024 to $31.1 million in Q1 2025, primarily due to lower interest expenses [21] - The net increase in net assets resulting from operations was $19.9 million, down from $27.9 million in the same quarter of the previous year [25] Investment Portfolio - As of March 31, 2025, the fair value of the investment portfolio was $2.0 billion, with a comprehensive investment portfolio fair value of $3.1 billion [4] - The portfolio had a non-accrual rate of 0.4% at fair value and 0.6% at cost [4] - The comprehensive investment portfolio was diversified across approximately 940 unique issuers in over 105 industries, with 98.2% invested in senior secured loans [10] Capital and Liquidity - The company had $549.3 million drawn on $970 million of total commitments available on its revolving credit facilities as of March 31, 2025 [26] - Available capital, including anticipated borrowing capacity, exceeded $800 million [29] - The net debt-to-equity ratio was 1.04x, within the company's target range of 0.9x to 1.25x [28] Market Position and Strategy - The company is actively engaged with portfolio companies to navigate uncertainties, particularly regarding tariffs, and is seeing a growing pipeline of asset-based lending opportunities [3] - The portfolio is heavily collateralized by working capital assets and focuses on domestic services businesses, positioning the company well for current market conditions [3]
SLR Investment Corp. Schedules the Release of its Financial Results for the Quarter Ended March 31, 2025
Newsfilter· 2025-04-03 12:00
Company Overview - SLR Investment Corp. is a closed-end investment company that operates as a business development company under the Investment Company Act of 1940 [4] - The company specializes in niche markets and primarily invests in leveraged U.S. middle market companies through cash flow senior secured loans, including first lien and second lien debt instruments, as well as asset-based loans [4] Upcoming Financial Results - The company will release its financial results for the quarter ended March 31, 2025, on May 7, 2025, after the close of financial markets [1] - An earnings conference call and audio webcast will be held on May 8, 2025, at 10:00 a.m. Eastern Time [1] Conference Call Participation - Interested parties can participate in the conference call by dialing (800) 225-9448 for domestic calls or (203) 518-9708 for international calls, with a reference to SLR Investment Corp. and Conference ID: SLRC1Q25 [2] - A telephone replay will be available until May 22, 2025 [2] - The conference call will also be broadcast live over the Internet, accessible from the Event Calendar on the company's website [3]
Pasadena Private Lending closes on new $50 Million institutional round and extends senior credit facility
Prnewswire· 2025-03-31 13:00
Mark Parsa, Partner, SLR Capital Partners said: "SLR is excited to partner with the management team of PPL. We look forward to supporting PPL's growth and are excited to expand the strategic partnership by leveraging the expertise of PPL's strong team. About Pasadena Private Lending Pasadena Private Lending Inc. is a non-bank lender headquartered in Pasadena, CA, making Owner-Guaranteed Business Loans of $2 MM to $10 MM to lower middle-market companies with EBITDA of $1 MM to $5 MM. PPL focuses on companies ...
SLR Investment: Q4 Results Leave A Lot To Be Desired
Seeking Alpha· 2025-02-27 04:59
Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines high-quality dividend stocks with other investment vehicles such as Business Development Companies, REITs, and Closed End Funds to enhance income while achieving total returns comparable to traditional index funds [1]. Investment Strategy - The company advocates for a balanced approach to investing, focusing on both growth and income to optimize investment returns [1]. - The strategy aims to create a solid base of classic dividend growth stocks, which can be supplemented with other asset classes to boost overall investment income [1]. Performance Comparison - The total return from this hybrid investment strategy is reported to be on par with the S&P 500 index, indicating its effectiveness in generating competitive returns [1].
SLR Investment (SLRC) - 2024 Q4 - Earnings Call Transcript
2025-02-26 16:51
SLR Investment Corp. (NASDAQ:SLRC) Q4 2024 Earnings Conference Call February 26, 2025 10:00 AM ET Corporate Participants Michael Gross - Chairman & Co-Chief Executive Officer Shiraz Kajee - Chief Financial Officer Bruce Spohler - Co-Chief Executive Officer Conference Call Participants Erik Zwick - Lucid Capital Markets Casey Alexander - Compass Point Melissa Wedel - JPMorgan Paul Johnson - KBW Operator Good day, everyone, and welcome to the Q4 2024 SLR Investment Corp. Earnings call. At this time, all parti ...
SLR Investment (SLRC) - 2024 Q4 - Earnings Call Transcript
2025-02-27 01:50
Financial Data and Key Metrics Changes - For Q4 2024, the company generated net investment income of $0.44 per share, flat year-over-year but down from $0.45 in Q3 2024 [13][25] - Full-year net investment income per share increased by 5% to $1.77 compared to 2023 [14] - The net asset value at year-end rose to $18.20 from $18.09 a year ago, indicating strong credit quality [14][22] - The company's net investment income covered the quarterly dividend of $0.41 per share [13][25] Business Line Data and Key Metrics Changes - The portfolio consisted of $3.1 billion at year-end, with a yield of 12.1%, up from 11.8% in the prior quarter [16][30] - 94% of Q4 originations were in specialty finance, with a focus on asset-based lending (ABL) [17][29] - The equipment finance portfolio totaled over $1 billion, representing 37% of the total portfolio, with a yield increase to 10.7% from 9.4% [46] - The life sciences portfolio was approximately $240 million, contributing 18% of gross investment income for Q4 [48][50] Market Data and Key Metrics Changes - The company reported a net debt to equity ratio of 1.03, with expectations to migrate towards a target range of 0.9 to 1.25 [23] - The company had over $900 million of available capital to deploy, positioning it favorably for economic conditions [20] Company Strategy and Development Direction - The company emphasizes a multi-strategy approach to private credit investing, focusing on specialty finance to capture attractive risk-reward opportunities [12][54] - The investment strategy includes a significant allocation to specialty finance investments, which provide downside protection and higher yields [15][29] - The company aims to maintain relevance in sponsor finance by focusing on recession-resilient industries such as healthcare and business services [102] Management's Comments on Operating Environment and Future Outlook - Management noted the current economic environment includes rising geopolitical tensions and expectations for prolonged higher interest rates, which influence investment strategies [12] - The company remains optimistic about the specialty finance pipeline and expects to see improvements in sponsor finance conditions as CEO confidence increases [39][66] - Management highlighted the stability of the investment portfolio, with low levels of non-accruals and a diversified approach to mitigate risks [53][54] Other Important Information - The company has a strong credit profile, with 99.4% of the portfolio performing and only one investment on non-accrual [31][32] - The company declared a Q1 2025 quarterly distribution of $0.41 per share, payable on March 28, 2025 [26] Q&A Session Summary Question: Opportunities in specialty finance verticals and potential acquisitions - Management acknowledged seeing opportunities but passed on some due to better organic growth potential compared to acquisitions [60][61] Question: Structure and returns in sponsor finance - Management indicated that both spread compression and loosening of terms have stabilized, but current returns in sponsor finance are not attractive compared to specialty finance [65][66] Question: Equipment finance sector and yield volatility - Management stated that the equipment finance sector benefits from fixed-rate liabilities and is well-matched, with expectations for stable returns in the current environment [72][77] Question: ABL pipeline and transitioning cash flow opportunities - Management confirmed that the increase in the ABL pipeline comes from individual loans rather than acquiring new specialty finance companies [78][80] Question: Higher dividend income and its sustainability - Management indicated that the elevated dividend income is expected to be sustainable, driven by the acquisition of the Webster portfolio and strong ABL performance [106][108]