SLR Investment (US:SLRC)2025-11-04 21:07Investment Activity - For the three months ended September 30, 2025, the company invested approximately $276.9 million across 33 portfolio companies, compared to $157.1 million in 25 portfolio companies during the same period in 2024[202]. - During the three months ended September 30, 2025, investments sold, prepaid, or repaid totaled approximately $311.9 million, compared to $223.5 million for the same period in 2024[202]. - SSLP invested $18.5 million in 4 portfolio companies for the three months ended September 30, 2025, compared to $4.3 million in 7 portfolio companies for the same period in 2024[222]. Portfolio Composition - As of September 30, 2025, the company's portfolio consisted of 109 portfolio companies, with 22.9% in cash flow senior secured loans and 46.2% in asset-based senior secured loans[203]. - At September 30, 2025, 83.4% ($1.74 billion) of the income-producing investment portfolio was floating rate, while 16.6% ($344.7 million) was fixed rate[204]. - As of September 30, 2025, SLR Equipment had a total net investment in leases and loans of approximately $300.6 million on total assets of $337.5 million, with 507 funded leases and loans to 244 customers[211]. Financial Performance - SLR Credit had net income (loss) of ($1.7) million and $8.8 million for the three months ended September 30, 2025, and 2024, respectively, on gross income of $9.4 million and $13.7 million[209]. - For the three months ended September 30, 2025, SLR Equipment reported a net income of $1.3 million on gross income of $6.0 million, compared to a net loss of $2.3 million on gross income of $5.6 million for the same period in 2024[211]. - For the nine months ended September 30, 2025, SLR Business Credit had net income of $8.0 million on gross income of $41.6 million, compared to net income of $6.3 million on gross income of $31.2 million for the same period in 2024[217]. Revenue and Income - The company primarily generates revenue from interest and dividend income, with debt investments typically bearing interest at a floating rate[199]. - Gross investment income for the three months ended September 30, 2025, was $57.0 million, a decrease of 4.7% compared to $59.8 million for the same period in 2024[244]. - Net investment income for the three months ended September 30, 2025, totaled $21.6 million, down from $24.3 million in the same period of 2024, reflecting a decrease of 11.1%[246]. Expenses and Liabilities - The company expects general and administrative operating expenses related to ongoing operations to increase moderately in dollar terms[201]. - Net expenses for the three months ended September 30, 2025, were $35.4 million, compared to $35.4 million in the same period of 2024, indicating no change year-over-year[245]. - Total liabilities increased to $114.8 million as of September 30, 2025, from $99.3 million as of December 31, 2024, marking a rise of approximately 15.7%[231]. Cash and Distributions - The company declared a quarterly distribution of $0.41 per share, payable on December 26, 2025, to holders of record as of December 12, 2025[197]. - Cash distributions per share for fiscal 2025 total $1.64, consistent with the total for fiscal 2024, which was also $1.64[280]. - The company must distribute at least 90% of its ordinary income to maintain its RIC tax treatment, which may affect future distribution levels[281]. Debt and Credit Facilities - As of September 30, 2025, the company had outstanding USD equivalent borrowings under the Credit Facility totaling $498.4 million[259]. - The company had outstanding USD equivalent borrowings under the SPV Credit Facility totaling $165.1 million as of September 30, 2025[261]. - The credit facility for SLR Equipment was expanded to $350 million on March 1, 2024, with a maturity date of January 31, 2027[210]. Market Risks - The company is subject to financial market risks, including interest rate changes, which could materially impact net investment income[290]. - A hypothetical 1% decrease in SOFR would decrease net investment income by $0.07 per average share over the next twelve months[292]. - Conversely, a hypothetical 1% increase in SOFR would increase net investment income by approximately $0.06 per average share over the next twelve months[292]. Unfunded Commitments - As of September 30, 2025, the company had total unfunded capital commitments of $408.4 million, up from $234.6 million on December 31, 2024, representing a 74% increase[277]. - The largest unfunded capital commitment is to Cogent Biosciences, Inc. at $56.1 million, followed by SLR Credit Solutions at $44.3 million and Ardelyx, Inc. at $29.3 million[277]. - The company has sufficient cash and liquid securities available to fund its commitments as of the reporting dates[278].