August 06, 2019
Apollo Investment Corporation Reports Financial Results for the Quarter Ended June 30, 2019
Fiscal First Quarter and Other Recent Highlights:
- Net investment income per share for the quarter was $0.50 compared to $0.47 for the quarter ended March 31, 2019
- Net asset value per share as of the end of the quarter was $19.00 compared to $19.06 as of March 31, 2019, a 0.3% decline
- Continued to successfully execute portfolio repositioning strategy, including increasing exposure to core strategies(1) to 83% of the portfolio(2) as of the end of the quarter
- Gross commitments made during the quarter totaled $451 million
- Gross fundings during the quarter totaled $312 million(3) and net fundings totaled $215 million(4)
- Net leverage(5) as of the end of the quarter was 1.03x, compared to 0.83x as of March 31, 2019
- Declared a distribution of $0.45 per share
- Repurchased 949,633 million shares of common stock for an aggregate cost of $15.1 million during the quarter
- Commitments to the Company’s Senior Secured Facility (“Facility”) increased by $70 million with the addition of one new lender during the quarter, increasing the size of the Facility to $1.71 billion
- Announced the redemption of $150 million of 6 7/8% senior unsecured notes due 2043 in July(6)
- Kroll Bond Rating Agency affirmed the Company's investment grade rating in July(7)
NEW YORK, Aug. 06, 2019 (GLOBE NEWSWIRE) -- Apollo Investment Corporation (NASDAQ: AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its first fiscal quarter ended June 30, 2019. The Company’s net investment income was $0.50 per share for the quarter ended June 30, 2019, compared to $0.47 per share for the quarter ended March 31, 2019. The Company’s net asset value (“NAV”) was $19.00 per share as of June 30, 2019, compared to $19.06 as of March 31, 2019.
On August 6, 2019, the Board of Directors declared a distribution of $0.45 per share, payable on October 7, 2019 to shareholders of record as of September 20, 2019.
Mr. Howard Widra, Apollo Investment’s Chief Executive Officer commented, “During the quarter, we had substantial portfolio growth resulting from robust origination activity. This origination activity, in a competitive market, is another indication of the strength of our origination platform. Consistent with our plan, the growth was in lower risk corporate loans which further diversified the portfolio. Also, consistent with our plan, we reduced the size of our investment in Merx Aviation to less than 15% of the total portfolio and reduced non-core assets to 17% of the portfolio. Net investment income was strong for the quarter benefiting from the net growth in the portfolio, the impact from the total return provision in our fee structure, and the catch-up income from an investment being restored to accrual status. Net asset value per share declined slightly due to a net loss on the portfolio partially offset by strong earnings and the accretive impact from stock buybacks.” Mr. Howard Widra, continued, “We continue to manage our liabilities and optimize our capital structure. We increased the size of our revolving credit facility by $70 million during the quarter and subsequent to quarter end, we announced that we would be redeeming our 2043 unsecured notes.”
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| (1) | Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. |
| (2) | On a fair value basis. |
| (3) | Excludes $6 million of gross fundings for Merx Aviation and $117 million of gross fundings for revolvers |
| (4) | Includes $46 million net repayment from Merx Aviation and $25 million net fundings for revolvers |
| (5) | The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. |
| (6) | On July 12, 2019, the Company notified U.S. Bank National Association, the trustee (the“Trustee”) for the Company’s 6.875% Senior Notes due 2043 (the“Notes”), of the Company’s election to redeem the $150 million aggregate principal amount of the Notes outstanding, and instructed the Trustee to provide notice of such redemption to the holders of the Notes in accordance with the terms of the indenture governing the Notes. The Company expects the redemption to be completed on August 12, 2019. |
| (7) | Kroll Bond Rating Agency affirmed the Company's issuer and senior unsecured debt ratings of ‘BBB-’ with a Stable Outlook in July 2019. |
FINANCIAL HIGHLIGHTS
| ($ in billions, except per share data) | June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||
| Total assets | $ | 2.70 | $ | 2.50 | $ | 2.38 | $ | 2.39 | $ | 2.57 | |||||||||
| Investment portfolio (fair value) | $ | 2.62 | $ | 2.41 | $ | 2.31 | $ | 2.32 | $ | 2.50 | |||||||||
| Debt outstanding | $ | 1.35 | $ | 1.13 | $ | 0.99 | $ | 0.95 | $ | 1.10 | |||||||||
| Net assets | $ | 1.29 | $ | 1.31 | $ | 1.32 | $ | 1.37 | $ | 1.39 | |||||||||
| Net asset value per share | $ | 19.00 | $ | 19.06 | $ | 19.03 | $ | 19.40 | $ | 19.42 | |||||||||
| Debt-to-equity ratio | 1.05 | x | 0.86 | x | 0.76 | x | 0.69 | x | 0.79 | x | |||||||||
| Net leverage ratio (1) | 1.03 | x | 0.83 | x | 0.74 | x | 0.68 | x | 0.78 | x | |||||||||
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| (1) | The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. |
PORTFOLIO AND INVESTMENT ACTIVITY
| Three Months Ended June 30, | |||||||
| (in millions)* | 2019 | 2018 | |||||
| Investments made in portfolio companies | $ | 435.3 | $ | 359.0 | |||
| Investments sold | (9.6 | ) | (14.8 | ) | |||
| Net activity before repaid investments | 425.7 | 344.1 | |||||
| Investments repaid | (210.7 | ) | (93.8 | ) | |||
| Net investment activity | $ | 215.0 | $ | 250.3 | |||
| Portfolio companies at beginning of period | 113 | 90 | |||||
| Number of new portfolio companies | 21 | 7 | |||||
| Number of exited portfolio companies | (5 | ) | (1 | ) | |||
| Portfolio companies at end of period | 129 | 96 | |||||
| Number of investments made in existing portfolio companies | 30 | 20 | |||||
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| * Totals may not foot due to rounding. | |
OPERATING RESULTS
| Three Months Ended June 30, | |||||||
| (in millions)* | 2019 | 2018 | |||||
| Net Investment Income | $ | 34.5 | $ | 31.5 | |||
| Net Realized and Change in Unrealized Gains (Losses) | (10.7 | ) | (18.3 | ) | |||
| Net Increase in Net Assets Resulting from Operations | $ | 23.8 | $ | 13.3 | |||
| (per share)* (1) | |||||||
| Net Investment Income | $ | 0.50 | $ | 0.44 | |||
| Net Realized and Change in Unrealized Gains (Losses) | $ | (0.16 | ) | $ | (0.25 | ) | |
| Earnings per share — basic | $ | 0.35 | $ | 0.18 | |||
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* Totals may not foot due to rounding.
(1) Based on the weighted average number of shares outstanding for the period presented.
SHARE REPURCHASE PROGRAM *
During the three months ended June 30, 2019, the Company repurchased 949,633 shares at a weighted average price per share of $15.92, inclusive of commissions, for a total cost of $15.1 million. During the period from July 1, 2019 through August 5, 2019, the Company repurchased 136,010 shares at a weighted average price per share of $16.11 inclusive of commissions, for a total cost of $2.2 million. Since the inception of the share repurchase program and through August 5, 2019, the Company repurchased 11,122,411 shares at a weighted average price per share of $16.92, inclusive of commissions, for a total cost of $188.2 million, leaving a maximum of $61.8 million available for future purchases under the current Board authorization of $250 million.
* Share figures have been adjusted for the one-for-three reverse stock split which was completed after market close on November 30, 2018.
CONFERENCE CALL / WEBCAST AT 5:00 PM EDT ON AUGUST 6, 2019
The Company will host a conference call on Tuesday, August 6, 2019 at 5:00 p.m. Eastern Time. All interested parties are welcome to participate in the conference call by dialing (888) 802-8579 approximately 5-10 minutes prior to the call; international callers should dial (973) 633-6740. Participants should reference Apollo Investment Corporation or Conference ID #8523049 when prompted. A simultaneous webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Events Calendar in the Shareholder section of our website at www.apolloic.com. Following the call, you may access a replay of the event either telephonically or via audio webcast. The telephonic replay will be available approximately two hours after the live call and through August 27, 2019 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID #8523049. A replay of the audio webcast will also be available later that same day. To access the audio webcast please visit the Events Calendar in the Shareholder section of the Company’s website at www.apolloic.com.
SUPPLEMENTAL INFORMATION
The Company provides a supplemental information package to offer more transparency into its financial results and make its reporting more informative and easier to follow. The supplemental package is available in the Shareholders section of the Company’s website under Presentations at www.apolloic.com.
Our portfolio composition and weighted ave