Runway Growth Finance (US:RWAY)2025-11-06 21:13Investment Portfolio - As of September 30, 2025, the total fair value of investments was $945.964 million, a decrease from $1,076.840 million on December 31, 2024[240] - Senior secured loans comprised 90.66% of the total portfolio as of September 30, 2025, valued at $857.636 million[240] - The company held investments in 54 companies as of September 30, 2025, down from 57 companies at the end of 2024[239] - The fair value of preferred stock/units decreased to $37.386 million as of September 30, 2025, from $82.641 million at the end of 2024[240] - The ending investment portfolio as of September 30, 2025, was $945.964 million, down from $1,066.100 million as of September 30, 2024[243] - As of September 30, 2025, 64.35% of the debt investment portfolio was rated 2, indicating acceptable business prospects and compliance with covenants[244] - The investment portfolio's beginning value was $1,076.840 million as of September 30, 2025, compared to $1,067.009 million as of September 30, 2024[243] Financial Performance - For the three months ended September 30, 2025, the dollar-weighted annualized yield on debt investments was 16.83%, compared to 15.92% for the same period in 2024[241] - Total investment income for the three months ended September 30, 2025, was $36.7 million, unchanged from the same period in 2024, while for the nine months, it decreased to $107.3 million from $110.9 million[251][252] - Net investment income for the three months ended September 30, 2025, was $15.7 million, a slight decrease from $15.9 million in 2024, with per share figures of $0.43 and $0.41 respectively[260] - The net realized loss on investments for the three months ended September 30, 2025, was $1.3 million, attributed to losses on specific investments, while there were no realized gains or losses in the same period of 2024[262] - The net realized gain on investments for the nine months ended September 30, 2025, was $3.2 million, with gains from Gynesonics, Inc. offset by losses on other investments, while there were no realized gains or losses in 2024[263] - Total operating expenses for the nine months ended September 30, 2025, were $62.0 million, slightly up from $61.7 million in 2024, with per share expenses increasing to $1.67 from $1.57[255] Regulatory and Management - The company has elected to be treated as a regulated investment company (RIC) and a business development company (BDC) under relevant regulations[233] - The company is externally managed by Runway Growth Capital LLC, which provides investment advisory services[236] - The company is subject to various regulatory requirements, including the need to invest at least 70% of its assets in qualifying assets[233] Mergers and Acquisitions - The company is in the process of merging with SWK Holdings Corporation, with potential impacts on business operations and shareholder interests[234] - On October 9, 2025, the company entered into a Merger Agreement with SWK Holdings Corporation, involving multiple merger steps to consolidate operations[292] - The consummation of the Mergers is subject to customary closing conditions, including the effectiveness of the Registration Statement and approval by SWK's stockholders[299] - The Key Stockholder owns approximately 69.9% of the outstanding shares of SWK Common Stock and has agreed to vote in favor of the Merger Agreement[300] Liquidity and Debt - As of September 30, 2025, the company had $371.9 million in available liquidity, including $7.9 million in cash and cash equivalents, and $364.0 million available under its Credit Facility[273] - The company had a total of $1,162 thousand in forgone interest income from loans on non-accrual status as of September 30, 2025[246] - As of September 30, 2025, the company had $450.3 million in debt outstanding, with $25.0 million due within the next year[276] - The company completed $12.0 million of additional debt commitments from October 1, 2025, through November 6, 2025[291] Risk Factors - The company anticipates potential risks related to economic downturns, interest rate volatility, and competition for investment opportunities[229] - A hypothetical 200 basis point increase in interest rates could increase investment income by a maximum of $15.5 million, while a decrease could reduce it by a maximum of $8.8 million[304] - Investments denominated in foreign currencies are subject to risks associated with currency exchange rate fluctuations, which may be exacerbated by current economic conditions[308] Shareholder Returns - The company declared dividends of $13.0 million and $39.5 million for the three and nine months ended September 30, 2025, respectively, with the majority distributed in cash[286] - The company repurchased 1,213,391 shares for an aggregate purchase price of $12.5 million under the Fourth Repurchase Program as of September 30, 2025[284]