Logan Ridge Finance (LRFC) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results Financial Performance Highlights Logan Ridge reported Q1 2025 NII of $0.35 per share and NAV of $29.66 per share, with total investment income decreasing and NAV declining due to unrealized losses Q1 2025 Key Financial Metrics (in millions) | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Total Investment Income | $4.6 | $5.4 | | Net Investment Income (NII) | $0.9 | $1.5 | | NII per Share | $0.35 | $0.56 | | Net Asset Value (NAV) per Share | $29.66 | $32.04 | Year-over-Year Comparison (Q1 2025 vs Q1 2024) (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Investment Income | $4.6 | $5.0 | | Total Operating Expenses | $3.7 | $4.1 | | Net Investment Income (NII) | $0.9 | $0.9 | | NII per Share | $0.35 | $0.35 | - The company experienced a net decrease in net assets from operations of $5.4 million in Q1 2025, a sharp contrast to the net increase of $1.9 million in Q1 2024, driven by a significant net change in unrealized depreciation on investments of ($8.8 million)[11] Management Commentary and Strategy Management highlighted strategic rotation from legacy equity, net portfolio deployment, and urged shareholders to vote for the proposed merger with Portman Ridge for enhanced value - Successfully exited the equity investment in GA Communications, Inc., its second-largest non-yielding equity investment[3][6] - The legacy equity portfolio has been reduced to 10.8% of the total portfolio at fair value as of March 31, 2025, down from 13.8% in the prior quarter and 18.2% in Q1 2024[6] - Management strongly encourages shareholders to vote FOR the proposed merger with Portman Ridge (PTMN), citing benefits of increased scale, improved liquidity, and enhanced operational efficiencies[3][8] Investment Portfolio Analysis The investment portfolio decreased slightly to $169.6 million, with debt investments increasing to 86.6% of fair value and non-accrual investments decreasing as a percentage - During Q1 2025, the company made $15.1 million in investments and had $12.4 million in repayments and sales, resulting in a net deployment of approximately $2.7 million[7][10] Portfolio Composition by Fair Value | Investment Type | % of Portfolio (Mar 31, 2025) | % of Portfolio (Dec 31, 2024) | | :--- | :--- | :--- | | First Lien Debt | 67.6% | 64.7% | | Second Lien Debt | 5.4% | 5.3% | | Subordinated Debt | 13.6% | 13.3% | | Equity | 10.8% | 13.8% | | Other | 2.6% | 2.9% | - As of March 31, 2025, debt investments in three portfolio companies were on non-accrual status, representing 2.2% of the investment portfolio's fair value, down from 4.6% as of December 31, 2024[10] - The weighted average annualized yield on the debt investment portfolio was 10.7% as of March 31, 2025, unchanged from the prior quarter[10] Corporate Developments and Outlook The Board declared a $0.36 per share distribution, and management expressed optimism about the proposed merger with Portman Ridge and future growth positioning - On May 7, 2025, the Board of Directors approved a second quarter distribution of $0.36 per share, payable on May 29, 2025[5] - Management believes the company is well-positioned to grow earnings and increase long-term shareholder value by continuing to monetize its legacy equity portfolio[7] - The proposed merger with Portman Ridge is presented as a marquee transaction for the BDC franchise and a significant milestone for the BC Partners Credit Platform[8] Detailed Financial Statements Consolidated Statements of Assets and Liabilities Logan Ridge's total assets and liabilities decreased, resulting in a decline in total net assets and net asset value per share Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total investments at fair value | $169,613 | $172,290 | | Cash and cash equivalents | $5,073 | $15,015 | | Total assets | $180,662 | $192,669 | | Total liabilities | $101,887 | $107,570 | | Total net assets | $78,775 | $85,099 | | Net asset value per share | $29.66 | $32.04 | Consolidated Statements of Operations Q1 2025 operations resulted in net investment income, but significant unrealized depreciation on investments led to a net decrease in net assets Statement of Operations Summary (in thousands) | Line Item | For the Three Months Ended March 31, 2025 | | :--- | :--- | | Total investment income | $4,631 | | Total expenses | $3,703 | | Net investment income | $928 | | Net realized gain on investments | $2,603 | | Net change in unrealized depreciation on investments | ($8,755) | | Net decrease in net assets from operations | ($5,370) | | Net decrease in net assets per share | ($2.02) | Other Information Conference Call Information A conference call and webcast to discuss Q1 2025 financial results are scheduled for May 9, 2025, at 11:00 a.m. Eastern Time - A conference call is scheduled for Friday, May 9, 2025, at 11:00 a.m. Eastern Time[15] - A live audio webcast will be available on the company's website, and a replay will be available through May 16, 2025[17][18] Forward-Looking Statements and Merger Information This report contains forward-looking statements regarding the proposed Portman Ridge merger, urging shareholders to review SEC filings for complete information and clarifying it is not an offer to sell securities - The report includes forward-looking statements involving risks and uncertainties, particularly related to the consummation and potential benefits of the proposed merger with PTMN[23] - Shareholders of both LRFC and PTMN are urged to read the Registration Statement (No. 333-285230) and the Joint Proxy Statement for important details regarding the proposed merger[24] - The document explicitly states it is not a solicitation or an offer to sell securities[27]