SLR Investment (SLRC)

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SLR Investment (SLRC) - 2024 Q4 - Earnings Call Transcript
2025-02-26 16:02
Financial Data and Key Metrics Changes - For Q4 2024, net investment income (NII) was flat year-over-year but decreased by $0.01 from Q3 2024, covering a quarterly dividend of $0.41 [8][9] - Full year NII per share increased by 5% to $1.77 compared to 2023 [9] - Net asset value (NAV) at year-end rose to $18.2 from $18.09 a year ago, reflecting the credit portfolio's overall health [9][14] - The company's gross investment income for Q4 totaled $55.6 million, down from $59.8 million in Q3 [16] Business Line Data and Key Metrics Changes - The comprehensive portfolio at year-end was approximately $3.1 billion, with a yield of 12.1%, up from 11.8% in the prior year [10][18] - The asset-based lending (ABL) portfolio totaled $1 billion, with a weighted average asset level yield of 14.6%, compared to 14.4% in the prior quarter [23][24] - Equipment finance portfolio represented 37% of the total portfolio, with a weighted average asset level yield of 10.7%, up from 9.4% [25][26] - Life sciences portfolio totaled approximately $240 million, with over 87% invested in companies with more than twelve months of cash runway [27] Market Data and Key Metrics Changes - The company noted a significant increase in the ABL pipeline, driven by regional banks retreating from the ABL market [8][24] - The weighted average investment risk rating was under two, indicating a strong credit profile, with over 99% rated two or higher [18] Company Strategy and Development Direction - The company emphasizes a multi-strategy approach to private credit investing, focusing on capital preservation and portfolio diversification [31][32] - The strategy includes a shift towards specialty finance investment opportunities, with a growing pipeline [31][32] - The company aims to maintain relevance in the sponsor finance community by focusing on specific industries such as healthcare and business services [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current economic uncertainties, including rising geopolitical tensions and expectations for a prolonged high-rate environment [8][31] - The company anticipates improved conditions in sponsor finance as CEO confidence increases and M&A activity picks up [22][31] Other Important Information - The company has a low non-accrual rate of 0.6% in its investment portfolio, significantly below the peer average [12] - The company has over $900 million of available capital to deploy, positioning it favorably for future investments [12] Q&A Session Summary Question: Opportunities in specialty finance verticals and portfolio acquisitions - Management noted that they passed on some acquisition opportunities last year due to better organic growth potential [38] Question: Structure and returns in sponsor finance - Management indicated that both spread compression and loosening of terms in the sponsor market have stabilized, but returns remain unattractive compared to ABL strategies [41][42] Question: Equipment finance sector and yield stability - Management confirmed that the equipment finance sector benefits from fixed-rate liabilities and is well-matched, leading to stable returns [50][51] Question: ABL opportunities and repayments - Management explained that the increase in ABL pipeline is primarily from individual loans rather than large portfolios, and repayments were idiosyncratic rather than indicative of a trend [62] Question: Dividend income and future expectations - Management indicated that the elevated dividend income in Q4 was largely driven by the ABL business and the acquisition of the Webster portfolio, suggesting it could be a good run rate going forward [71]
SLR Investment (SLRC) Q4 Earnings Surpass Estimates
ZACKS· 2025-02-25 23:30
Earnings Performance - SLR Investment (SLRC) reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.43 per share, with an earnings surprise of 2.33% [1] - The company posted revenues of $55.58 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.01%, compared to year-ago revenues of $59.79 million [2] Stock Performance - SLR Investment shares have increased approximately 8.4% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.42 on revenues of $55.74 million, and for the current fiscal year, it is $1.65 on revenues of $220.35 million [7] - The estimate revisions trend for SLR Investment is favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Financial - SBIC & Commercial Industry, to which SLR Investment belongs, is currently in the top 16% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]
SLR Investment (SLRC) - 2024 Q4 - Annual Results
2025-02-25 22:15
Financial Performance - Net investment income for Q4 2024 was $23.8 million, or $0.44 per share, with a declared quarterly distribution of $0.41 per share[2][5]. - For the full year 2024, net investment income totaled $96.3 million, or $1.77 per share, compared to $92.1 million, or $1.69 per share in 2023[6][26]. - The company generated gross investment income of $232.4 million for the fiscal year 2024, an increase from $229.3 million in 2023[23]. - Total investment income for the fiscal year 2024 was $232.4 million, slightly up from $229.3 million in 2023[41]. - The company reported a net investment income of $96.3 million for the fiscal year 2024, compared to $92.1 million in 2023[41]. - Earnings per average share for the fiscal year ended December 31, 2024, were $1.76, up from $1.40 in 2023, reflecting a 25.7% increase[28]. Asset and Portfolio Management - As of December 31, 2024, net asset value (NAV) was $18.20 per share, unchanged from the previous quarter[3][5]. - The investment portfolio fair value was $2.0 billion, with a comprehensive investment portfolio fair value of $3.1 billion[5]. - The comprehensive investment portfolio was diversified across approximately 890 unique issuers, with 98.2% invested in senior secured loans[12][18]. - The weighted average asset yield for the comprehensive investment portfolio was 12.1%[14]. - As of December 31, 2024, 99.6% of the portfolio was performing on a fair value basis, with only one investment on non-accrual[18]. Expenses and Commitments - Total net expenses decreased to $136.1 million in 2024 from $137.2 million in 2023, primarily due to lower interest expenses[24]. - As of December 31, 2024, the company had over $900 million of available capital in aggregate, including anticipated borrowing capacity[32]. - The company had unfunded commitments of approximately $167.2 million as of December 31, 2024[33]. Debt and Equity - As of December 31, 2024, the company had $507 million drawn on $970 million of total commitments available on its revolving credit facilities[29]. - The company's net debt-to-equity ratio improved to 1.03x as of December 31, 2024, down from 1.19x as of December 31, 2023[31]. Investment Activity - During Q4 2024, the company made investments totaling $338.4 million and had repayments of $442.7 million, resulting in a net portfolio activity of -$104.3 million[6][8]. - The net realized and unrealized loss for the fiscal year ended December 31, 2024, was $0.6 million, significantly improved from a loss of $15.7 million in 2023[27]. Distribution - The company declared a quarterly distribution of $0.41 per share, payable on March 28, 2025[34]. - For the fiscal year ended December 31, 2024, the net increase in net assets resulting from operations was $95.8 million, compared to $76.4 million in 2023, representing a 25.5% increase[28].
SLR Investment (SLRC) - 2024 Q4 - Annual Report
2025-02-25 21:01
Investment Activity - The company invested approximately $468 million across about 50 portfolio companies in 2024, down from approximately $812 million across over 85 portfolio companies in 2023[412]. - Investments sold, prepaid, or repaid in 2024 totaled approximately $634 million, compared to approximately $750 million in 2023[412]. - The portfolio consisted of 122 companies as of December 31, 2024, with 30.7% in cash flow senior secured loans and 35.8% in asset-based senior secured loans[413]. - The company closed a private offering of $50 million of unsecured notes due 2028 with a fixed interest rate of 6.14%[405]. - The Company authorized a share repurchase program of up to $50 million on May 7, 2024, with no shares repurchased during the fiscal year ended December 31, 2024[426]. - The Company and the Investor contributed combined equity capital of $95.75 million to SSLP as of December 31, 2024, an increase from $85.75 million as of December 31, 2023[429]. - The company committed $50 million to SSLP for providing administrative services related to its ongoing business affairs[477]. Financial Performance - SLR Credit had net income of $24.9 million in 2024, significantly up from $6.5 million in 2023, on gross income of $55.2 million compared to $57.8 million[417]. - KBHT achieved net income of $12.0 million for the year ended December 31, 2024, compared to $9.1 million for the year ended December 31, 2023, marking a 32.0% increase[421]. - SLR Business Credit reported a net income of $10.5 million for the year ended December 31, 2024, compared to a net loss of $9.5 million for the year ended December 31, 2023[425]. - The company reported a net income of $13,373 thousand for 2024, compared to $4,469 thousand in 2023, which is an increase of 199.5%[440]. - The company reported a net increase in net assets from operations of $95.8 million and $76.4 million for the fiscal years ended December 31, 2024 and 2023, respectively[458]. - The company reported total outstanding senior securities of $342.043 million for Fiscal 2024, with an asset coverage ratio of $642 per unit[480]. - The company reported a net realized loss on investments and cash equivalents of $2,252,000 for 2024, a significant improvement from a loss of $27,983,000 in 2023[528]. Asset and Liability Management - As of December 31, 2024, SLR Credit had total funded loans of approximately $317.6 million on total assets of $364.3 million[416]. - As of December 31, 2024, total assets for SSLP increased to $197,461 thousand from $195,868 thousand in 2023, representing a growth of 0.6%[439]. - Total liabilities decreased to $99,279 thousand in 2024 from $108,070 thousand in 2023, a reduction of 8.2%[439]. - Total liabilities decreased to $1,456,491,000 in 2024 from $1,537,229,000 in 2023, representing a reduction of approximately 5.3%[526]. - The company had a total of $462.9 million of unused borrowing capacity under its Credit Facility and SPV Credit Facility[459]. - The company had a net increase in cash and cash equivalents of $70,117,000 for 2024, compared to a decrease of $(84,179,000) in 2023[535]. Investment Income and Returns - Interest income for SSLP rose significantly to $24,330 thousand in 2024, up from $10,209 thousand in 2023, marking an increase of 138.5%[440]. - Net investment income for SSLP increased to $12,745 thousand in 2024, compared to $3,273 thousand in 2023, reflecting a growth of 288.5%[440]. - Total investment income for the year ended December 31, 2024, was $232,431,000, slightly up from $229,312,000 in 2023[528]. - Net investment income increased to $96,310,000 in 2024, compared to $92,091,000 in 2023, reflecting a growth of approximately 4%[528]. - The total return for the year ended December 31, 2024, was 16.22%, a significant increase compared to 2.77% in 2023[484]. Debt and Financing - The SSLP Facility was expanded to $150 million on October 20, 2023, with borrowings outstanding of $96.6 million as of December 31, 2024[428]. - Outstanding borrowings under the SPV Credit Facility totaled $165.1 million as of December 31, 2024[463]. - The Credit Facility was amended to include $695 million of revolving credit and $140 million of term loans, with a maturity date in August 2029[462]. - The company closed a private offering of $49 million of the 2027 Series G Unsecured Notes with a fixed interest rate of 6.24% on December 16, 2024[461]. - The company closed a private offering of $75 million of the 2026 Unsecured Notes with a fixed interest rate of 4.375%[467]. - The company has floating rate investments primarily based on SOFR, which could lead to volatility in net investment income based on interest rate changes[502]. Portfolio Composition - The company’s investment portfolio is primarily composed of private transactions exempt from registration under the Securities Act, indicating a focus on non-public investments[584]. - The largest industry classification is Diversified Financial Services, accounting for 27.7% of total investments[556]. - The second-largest sector is Multi-Sector Holdings, representing 18.6% of total investments[556]. - Health Care Providers & Services make up 13.6% of the total investments[556]. - The portfolio is diversified across sectors including health care, insurance, and software[435]. Compliance and Governance - The company has adopted a formal code of ethics governing the conduct of its officers and directors, ensuring compliance with regulatory requirements[501]. - The company is in compliance with all financial and operational covenants required by the Debt Instruments as of December 31, 2024[469]. - The company intends to qualify as a RIC and is required to distribute at least 90% of its investment company taxable income to stockholders annually[450]. - The company may face limitations on its ability to make distributions due to asset coverage tests and credit facility provisions[496].
SLR Investment Corp. Announces Quarter and Year Ended December 31, 2024 Financial Results
Globenewswire· 2025-02-25 21:01
Core Insights - SLR Investment Corp. reported a net investment income of $23.8 million, or $0.44 per share, for Q4 2024, with a declared quarterly distribution of $0.41 per share [2][33] - The net asset value (NAV) remained stable at $18.20 per share as of December 31, 2024, unchanged from the previous quarter [3][5] - The company has a diversified investment portfolio with a fair value of $2.0 billion and a comprehensive investment portfolio valued at $3.1 billion [5][10] Financial Performance - For the year ended December 31, 2024, the net investment income totaled $96.3 million, or $1.77 per share, compared to $92.1 million, or $1.69 per share, for the previous year [25][27] - The company experienced a net increase in net assets from operations of $95.8 million for the year, up from $76.4 million in 2023 [27] - Total investment income for the fiscal year was $232.4 million, an increase from $229.3 million in 2023, primarily due to higher dividend income from SSLP and specialty finance equity investments [22] Investment Activity - During Q4 2024, the company made investments totaling $338.4 million while prepaying and selling investments worth $442.7 million [6][8] - For the year, total investments made amounted to $1,352.6 million, with repayments and sales totaling $1,377.8 million [6][8] - The comprehensive investment portfolio is diversified across approximately 890 unique issuers in over 110 industries, with 98.2% invested in senior secured loans [10][12] Asset Quality - As of December 31, 2024, 99.6% of the portfolio was performing on a fair value basis, with only one investment on non-accrual [16] - The internal investment ratings indicate that 34.9% of investments are rated 1 (least risk), while 64.2% are rated 2 [17] Capital and Liquidity - The company had $507 million drawn on $970 million of total commitments available on its revolving credit facilities as of December 31, 2024 [28] - The net debt-to-equity ratio was 1.03x, down from 1.19x a year earlier, within the target range of 0.9x to 1.25x [30] - As of year-end, the company had over $900 million of available capital, including anticipated borrowing capacity [31]
SLR Investment: Navigating Deteriorating Conditions Through Multi-Approach Strategy
Seeking Alpha· 2025-01-23 10:09
Group 1 - The market conditions for business development companies are expected to be challenging in 2025 due to increased competition and rate cuts [1] - Investment income on floating rate portfolios is anticipated to decline significantly as a result of these market changes [1] - The article emphasizes the importance of unbiased analysis in helping investors choose effective investment strategies to navigate future market trends [1]
SLR Investment Corp. Schedules the Release of its Financial Results for the Quarter and Fiscal Year Ended December 31, 2024
Globenewswire· 2025-01-13 13:00
Earnings Announcement and Conference Call - SLR Investment Corp will release its financial results for the quarter and fiscal year ended December 31, 2024 on February 25, 2025 after market close [1] - The company will host an earnings conference call and audio webcast at 10:00 a m Eastern Time on February 26, 2025 [1] - Interested parties can participate in the conference call by dialing (800) 579-2543 for domestic callers or (785) 424-1789 for international callers [2] - The conference call will be broadcast live over the Internet and can be accessed from the Event Calendar within the Investors tab of SLR Investment Corp's website [3] - A telephone replay will be available until March 12, 2025 and can be accessed by dialing (800) 839-4568 for domestic callers or (402) 220-2681 for international callers [2] - A replay of the webcast will be available soon after the call for those unable to listen live [3] Company Overview - SLR Investment Corp is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940 [4] - The company is a specialty finance company with expertise in several niche markets [4] - SLR Investment Corp primarily invests directly and indirectly in leveraged U S middle market companies [4] - The company's investments are primarily in the form of cash flow senior secured loans including first lien and second lien debt instruments [4] - SLR Investment Corp also invests in asset-based loans including senior secured loans collateralized on a first lien basis primarily by current assets [4]
2 Hidden Opportunities For Up To 14% Yields
Seeking Alpha· 2024-12-12 12:35
Group 1 - The market generally trades based on the fundamental performance and strength of companies in the long term [1] - High Dividend Opportunities (HDO) is a community focused on income investors and retirees, boasting over 8,000 members [1] - HDO's Income Method aims to generate strong returns regardless of market volatility, simplifying retirement investing [1] Group 2 - HDO offers a Model Portfolio targeting a yield of 9-10% [2] - A limited-time discount of 17% on the annual price of $599.99 is available [2]
SLR Investment (SLRC) - 2024 Q3 - Earnings Call Transcript
2024-11-07 18:33
Financial Data and Key Metrics Changes - The earnings call discusses the financial performance for the quarter ended September 30, 2024, but specific financial data and key metrics have not been provided in the excerpts [2][4]. Business Line Data and Key Metrics Changes - There is no detailed information regarding the performance of various business lines in the provided content [4]. Market Data and Key Metrics Changes - The call does not include specific market data or key metrics changes [4]. Company Strategy and Development Direction and Industry Competition - The company is focused on its strategic direction and future growth, but specific strategies and competitive positioning have not been detailed in the excerpts [2][4]. Management Comments on Operating Environment and Future Outlook - Management has acknowledged the importance of forward-looking statements, indicating a cautious approach to future performance and financial results, but no specific comments on the operating environment or future outlook are provided [4]. Other Important Information - The call is being recorded and will be available for replay later, indicating transparency and accessibility for investors [3]. Q&A Session All Questions and Answers - There are no questions or answers provided in the excerpts from the earnings call [4].
SLR Investment (SLRC) Surpasses Q3 Earnings and Revenue Estimates
ZACKS· 2024-11-06 23:45
SLR Investment (SLRC) came out with quarterly earnings of $0.45 per share, beating the Zacks Consensus Estimate of $0.44 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2.27%. A quarter ago, it was expected that this business development company would post earnings of $0.44 per share when it actually produced earnings of $0.45, delivering a surprise of 2.27%.Over the last four quar ...