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Horizon Technology Finance Announces First Quarter 2018 Financial Results
First Quarter 2018 Highlights
- Earned net investment income of
$3.2 million , or$0.28 per share, for the quarter - Net asset value equaled
$134.3 million , or$11.65 per share, at quarter end - Funded
$11.0 million in loans to three companies - Achieved an annualized portfolio yield on debt investments of 14.4% for the quarter
- Ended the quarter with an investment portfolio of
$211.9 million - Experienced liquidity events from three portfolio companies
- Total liquidity as of
March 31, 2018 was$40.1 million - Floating rate loans comprised 99% of the outstanding principal of the loan portfolio at quarter end
- At quarter end, held a portfolio of warrant and equity positions in 76 portfolio companies
- Asset coverage for borrowed amounts of 241% as of
March 31, 2018 - Declared distributions of
$0.10 per share payable in each of July, August andSeptember 2018 , increasing cumulative declared distributions to$10.82 per share since going public in 2010
"During the first quarter, we continued to generate strong yields and solid net investment income," said
Mr. Pomeroy continued, "With the majority of our portfolio comprised of more recent vintage transactions, we believe we are positioned to generate a predictable income stream. In addition, with the recent renewal of our credit facility, we are also positioned to selectively capitalize on compelling venture lending opportunities and to continue to create opportunities for long-term shareholder value."
Operating Results
Total investment income was
The Company's dollar-weighted annualized portfolio yield on debt investments for the three months ended
The Company calculates the yield on dollar-weighted average debt investments for any period measured as (1) total investment income during the period divided by (2) the average of the fair value of debt investments outstanding on (a) the last day of the calendar month immediately preceding the first day of the period and (b) the last day of each calendar month during the period. The dollar-weighted annualized yield on average debt investments is higher than what investors will realize because it does not reflect expenses or any sales load paid by investors.
Total expenses for the three months ended
Net investment income for the three months ended
For the three months ended
For the three months ended
Portfolio Summary and Investment Activity
As of
($ in thousands) |
For the Three Months Ended March 31, |
|||
2018 |
2017 |
|||
Beginning portfolio |
$ 222,099 |
$ 194,003 |
||
New debt investments |
11,041 |
25,916 |
||
Less refinanced debt investments |
(2,479) |
— |
||
Net new debt investments |
8,562 |
25,916 |
||
Principal payments received on investments |
(8,799) |
(11,891) |
||
Early pay-offs |
(6,741) |
(27,209) |
||
Accretion of debt investment fees |
510 |
505 |
||
New debt investment fees |
(1,195) |
(270) |
||
New equity |
791 |
— |
||
Proceeds from sale of investments |
(2,715) |
(1,226) |
||
Net realized loss on investments |
(149) |
(10,845) |
||
Net unrealized (depreciation) appreciation on investments |
(458) |
11,131 |
||
Ending portfolio |
$ 211,905 |
$ 180,114 |
Net Asset Value
At
For the three months ended
Portfolio Asset Quality
The following table shows the classification of Horizon's loan portfolio at fair value by internal credit rating as of
($ in thousands) |
March 31, 2018 |
December 31, 2017 |
|||||||||
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
||||||
Credit Rating |
|||||||||||
4 |
4 |
$ 21,119 |
10.9% |
4 |
$ 18,701 |
9.2% |
|||||
3 |
23 |
150,452 |
78.0 |
25 |
176,560 |
86.6 |
|||||
2 |
5 |
21,399 |
11.1 |
3 |
5,632 |
2.8 |
|||||
1 |
— |
— |
— |
1 |
2,900 |
1.4 |
|||||
Total |
32 |
$ 192,970 |
100.0% |
33 |
$ 203,793 |
100.0% |
As of
Liquidity Events
Horizon experienced liquidity events from three portfolio companies in the quarter ended
In February, Horizon's portfolio company,
In March,
In March, with the proceeds of a new loan from Horizon,
Liquidity and Capital Resources
As of
At
On
As of
Stock Repurchase Program
On
Monthly Distributions Declared in Second Quarter 2018
On
Ex-Dividend Date |
Record Date |
Payment Date |
Amount Per Share |
June 18, 2018 |
June 19, 2018 |
July 17, 2018 |
$0.10 |
July 18, 2018 |
July 19, 2018 |
August 15, 2018 |
$0.10 |
August 16, 2018 |
August 17, 2018 |
September 14, 2018 |
$0.10 |
Total: |
$0.30 |
After paying distributions of
When declaring distributions, the Horizon board of directors reviews estimates of taxable income available for distribution, which may differ from consolidated net income under generally accepted accounting principles due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of spillover income carried over from a given year for distribution in the following year. The final determination of taxable income for each tax year, as well as the tax attributes for distributions in such tax year, will be made after the close of the tax year.
Conference Call
The Company will host a conference call on
A live webcast will be available on the Company's website at www.horizontechfinance.com.
A replay of the call will be available through
About
Forward-Looking Statements
Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the
Contacts:
Chief Financial Officer
(860) 674-9977
dtrolio@horizontechfinance.com
Investor Relations and Media Contact:
(212) 477-8438
lberman@igbir.com
Horizon Technology Finance Corporation and Subsidiaries |
||||
Consolidated Statements of Assets and Liabilities |
||||
(Dollars in thousands, except share and per share data) |
||||
March 31, 2018 |
December 31, 2017 |
|||
Assets |
||||
Non-affiliate investments at fair value (cost of $205,970 and $219,303, respectively) |
$ 204,936 |
$ 218,600 |
||
Affiliate investments at fair value (cost of $7,371 and $3,774, respectively) |
6,969 |
3,499 |
||
Total investments at fair value (cost of $213,341 and $223,077, respectively) |
211,905 |
222,099 |
||
Cash |
16,127 |
6,594 |
||
Interest receivable |
4,224 |
3,986 |
||
Other assets |
1,510 |
1,467 |
||
Total assets |
$ 233,766 |
$ 234,146 |
||
Liabilities |
||||
Borrowings |
$ 94,144 |
$ 94,075 |
||
Distributions payable |
3,457 |
3,456 |
||
Base management fee payable |
384 |
379 |
||
Incentive fee payable |
545 |
541 |
||
Other accrued expenses |
975 |
620 |
||
Total liabilities |
99,505 |
99,071 |
||
Net assets |
||||
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2018 and December 31, 2017 |
— |
— |
||
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 11,691,416 and 11,687,871 shares issued and 11,523,951 and 11,520,406 shares outstanding as of March 31, 2018 and December 31, 2017, respectively |
12 |
12 |
||
Paid-in capital in excess of par |
179,681 |
179,641 |
||
Distributions in excess of net investment income |
(2,145) |
(1,898) |
||
Net unrealized depreciation on investments |
(1,436) |
(978) |
||
Net realized loss on investments |
(41,851) |
(41,702) |
||
Total net assets |
134,261 |
135,075 |
||
Total liabilities and net assets |
$ 233,766 |
$ 234,146 |
||
Net asset value per common share |
$ 11.65 |
$ 11.72 |
Horizon Technology Finance Corporation and Subsidiaries |
||||
Consolidated Statements of Operations |
||||
(Dollars in thousands, except share and per share data) |
||||
For the Three Months Ended |
||||
March 31, |
||||
2018 |
2017 |
|||
Investment income |
||||
Interest income on investments |
||||
Interest income on non-affiliate investments |
$ 6,622 |
$ 6,279 |
||
Interest income on affiliate investments |
131 |
— |
||
Total interest income on investments |
6,753 |
6,279 |
||
Fee income |
||||
Prepayment fee income on non-affiliate investments |
285 |
460 |
||
Fee income on non-affiliate investments |
137 |
223 |
||
Total investment income |
7,175 |
6,962 |
||
Expenses |
||||
Interest expense |
1,484 |
1,316 |
||
Base management fee |
1,114 |
974 |
||
Performance based incentive fee |
545 |
430 |
||
Administrative fee |
184 |
194 |
||
Professional fees |
445 |
506 |
||
General and administrative |
193 |
175 |
||
Total expenses |
3,965 |
3,595 |
||
Net investment income |
3,210 |
3,367 |
||
Net realized and unrealized loss on investments |
||||
Net realized loss on non-affiliate investments |
(149) |
(10,845) |
||
Net realized loss on investments |
(149) |
(10,845) |
||
Net unrealized (depreciation) appreciation on non-affiliate investments |
(332) |
11,131 |
||
Net unrealized depreciation on affiliate investments |
(126) |
— |
||
Net unrealized (depreciation) appreciation on investments |
(458) |
11,131 |
||
Net realized and unrealized (loss) gain on investments |
(607) |
286 |
||
Net increase in net assets resulting from operations |
$ 2,603 |
$ 3,653 |
||
Net investment income per common share |
$ 0.28 |
$ 0.29 |
||
Net increase in net assets per common share |
$ 0.23 |
$ 0.32 |
||
Distributions declared per share |
$ 0.30 |
$ 0.30 |
||
Weighted average shares outstanding |
11,522,153 |
11,512,853 |
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