SWK Holdings(US:SWKH)2025-11-06 21:06Financial Performance - Total revenues for the three months ended September 30, 2025, were $10,882,000, an increase of 4.4% compared to $10,418,000 for the same period in 2024[12] - Net income for the three months ended September 30, 2025, was $8,780,000, representing a 153.5% increase from $3,468,000 in the prior year[12] - Net income for the nine months ended September 30, 2025, was $16,855,000, compared to $7,616,000 for the same period in 2024, representing a 121% increase[17] - Net cash provided by operating activities increased to $16,987,000 for the nine months ended September 30, 2025, from $16,160,000 in 2024, reflecting a growth of 5.1%[17] - The company reported a net loss before taxes of $660,000 for Q3 2025, compared to a loss of $892,000 in Q3 2024[68] - The company reported a net income of $8,780,000 for the three months ended September 30, 2025, compared to a net loss of $3,468,000 for the same period in 2024, representing a significant turnaround[112] Assets and Liabilities - Total assets decreased to $289,362,000 as of September 30, 2025, from $332,235,000 as of December 31, 2024, reflecting a decline of approximately 12.9%[10] - Total stockholders' equity as of September 30, 2025, was $254,206,000, down from $288,690,000 at the end of 2024, indicating a decrease of about 11.9%[10] - Total liabilities decreased to $35,156,000 as of September 30, 2025, from $43,545,000 as of December 31, 2024, a reduction of approximately 19.3%[10] - The carrying value of finance receivables, net, was $245,396,000 as of September 30, 2025, remaining unchanged from its fair value[105] Credit Losses and Impairments - The provision for credit losses for the three months ended September 30, 2025, was a benefit of $931,000, compared to a provision of $1,385,000 in the same period of 2024[12] - The provision for credit losses for the nine months ended September 30, 2025, was a benefit of $1.59 million, compared to a provision of $10.78 million for the same period in 2024[49] - The company incurred a loss on impairment of intangible assets amounting to $209,000 for the three months ended September 30, 2025[12] - The company reported a loss on impairment of intangible assets of $209,000 for the nine months ended September 30, 2025, compared to $5,771,000 in 2024[17] Cash Flow and Dividends - The company reported a cash dividend of $4.00 per share, totaling $49,078,000[14] - Cash dividends paid amounted to $49,078,000 in 2025, while there were no dividends paid in 2024[19] - The company had cash and cash equivalents of $10,206,000 at the end of the period, down from $17,178,000 at the end of the previous year[19] Finance Receivables - The company’s investment in finance receivables increased to $28,500,000 in 2025 from $17,736,000 in 2024, representing a 61% increase[19] - Total gross finance receivables as of September 30, 2025, amounted to $253.136 million, with term loans contributing $241.634 million and royalties $11.502 million[61] - Nonaccrual finance receivables totaled $11.50 million as of September 30, 2025, compared to $14.83 million as of December 31, 2024, a decrease of 22.5%[52] - The company collected $2.5 million on nonaccrual finance receivables for the nine months ended September 30, 2025, compared to $2.6 million for the same period in 2024[52] Employee and Operational Changes - The company had 9 full-time employees as of September 30, 2025, following the sale of substantially all assets of the Pharmaceutical Development segment[22] Debt and Financing - The Company entered into a revolving credit facility with an initial maximum principal amount of $45 million, with the option to increase it by up to $80 million[72] - The Company issued $30.0 million of 9.00% Senior Notes due 2027, with total net proceeds of approximately $30.6 million after deducting costs[78] - The outstanding balance of the 2027 Senior Notes as of September 30, 2025, was $32.969 million, net of debt issuance costs[79] - The Company recognized $0.9 million and $2.7 million of interest expense related to the Notes for the three and nine months ended September 30, 2025, respectively[81] Market and Economic Conditions - The company has a finance receivables portfolio primarily based on floating interest rates, which exposes it to interest rate risk[160] - Inflation may impact partner companies, potentially affecting their ability to repay loans, which could adversely affect the company's investment valuations[162] - The company does not currently engage in interest rate hedging activities, which may expose it to risks from interest rate fluctuations[161] Revenue Recognition - The company’s pharmaceutical development segment generated fee revenue from a collaboration agreement with AptarGroup, Inc., contributing to its revenue recognition[26] - The Company recognized total contract revenue of $2,153,000 for the nine months ended September 30, 2025, compared to $1,711,000 for the same period in 2024, indicating a year-over-year increase of approximately 25.8%[108]