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]

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 ...

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].

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]

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] 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 [17][29] - The cash flow loan portfolio was $634 million, with a weighted average yield of 10.6%, down from 11.1% in the prior quarter [38] Market Data and Key Metrics Changes - The company reported a significant increase in its asset-based lending (ABL) pipeline, with $128 million of new ABL investments and repayments of $205 million in Q4 [41][43] - The weighted average asset level yield for ABL was 14.6%, compared to 14.4% in the prior quarter [43] Company Strategy and Development Direction - The company is focusing on a multi-strategy approach to private credit investing, emphasizing specialty finance to capture attractive risk-reward opportunities [12][54] - The company aims to maintain a conservative underwriting approach while expanding its ABL and specialty finance segments [15][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current economic uncertainties, citing a strong investment track record and diversified portfolio [12][54] - The company anticipates improved conditions in sponsor finance as CEO confidence increases and M&A activity picks up [39] Other Important Information - The company had only one investment on non-accrual, representing 0.6% of the investment portfolio, which is below the peer average [20][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 noted that they passed on some acquisition opportunities last year due to better organic growth potential [60][61] Question: Sponsor finance structure and spread pressure - Management indicated that both spread compression and loosening of terms have stabilized but remain unattractive compared to specialty finance [65][66] Question: Equipment finance sector and yield volatility - Management stated that the equipment finance sector is reasonably well matched and benefits from the current inflationary environment [72][77] Question: ABL pipeline and transition from cash flow opportunities - Management confirmed that the increase in the ABL pipeline is primarily 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 [106][108]

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]

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]

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].

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].

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]