Rand Capital(US:RAND)2023-08-04 20:42Financial Data and Key Metrics Changes - Total investment income increased by 34% year-over-year to $1.8 million, driven by a 47% rise in interest income from portfolio companies and higher fee income [8][23] - Net investment income for the second quarter was $493,000, or $0.19 per share, down from $1.4 million, or $0.55 per share in the same period last year [11][28] - Net asset value at June 30, 2023, was $61.4 million, reflecting a more than 3% increase from the previous quarter, with net asset value per share rising to $23.79 from $23 [12][14] Business Line Data and Key Metrics Changes - The portfolio consisted of 29 companies, down by one due to the sale of DSD and Somerset Gas, with one new investment made during the quarter [24][30] - The fair value of investments totaled $66.8 million, a decrease attributed to the partial sale of ACV shares and valuation adjustments, but up 9% year-to-date from December 31, 2022 [30] Market Data and Key Metrics Changes - The investment in INEA, a new addition, now represents 7% of the total portfolio, while the automotive sector decreased by 7 percentage points due to the sale of DSD [4][5] - The portfolio mix includes approximately 60% in fixed-rate debt investments, 29% in equity investments in private companies, and 11% in publicly traded equities [29] Company Strategy and Development Direction - The company plans to leverage its strong balance sheet and liquidity to invest in new opportunities that will provide higher yields and support future dividends [17][28] - Continued focus on scaling the business through investments in subordinated debt instruments and related equity investments in lower middle market companies [17][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the strategy for the second half of the year, anticipating continued investment income growth [17][28] - The company highlighted a strong deal flow and unique market position to support future dividends [28] Other Important Information - A quarterly cash dividend of $0.25 per share was declared for the third quarter, consistent with the previous quarter [15][28] - The company maintained a cash position of approximately $8.4 million at quarter end, with significant liquidity available for future investments [13][14] Q&A Session Summary Question: What are the expectations for future dividends? - Management indicated that the strong deal flow and market position will support future dividends [28] Question: How does the company plan to utilize its liquidity? - The company plans to leverage its cash and credit facility to invest in new opportunities for higher yields [17][28] Question: Can you provide insights on the recent changes in the portfolio? - The portfolio saw a decrease in the automotive sector and an increase in distribution due to the new investment in INEA [4][5]