Horizon Technology Finance Announces Third Quarter 2024 Financial Results
- Third Quarter 2024 Net Investment Income per Share of
- Debt Portfolio Yield of 15.9% -
-
- Declares Regular Monthly Distributions Totaling
Third Quarter 2024 Highlights
-
Net investment income (“NII”) of
$11.8 million , or$0.32 per share, compared to$17.4 million , or$0.53 per share for the prior-year period -
Total investment portfolio of
$684.0 million as ofSeptember 30, 2024 -
Net asset value of
$342.5 million , or$9.06 per share, as ofSeptember 30, 2024 - Annualized portfolio yield on debt investments of 15.9% for the quarter
-
Horizon funded nine loans totaling
$93.1 million -
Raised total net proceeds of approximately
$18.4 million with “at-the-market” (“ATM”) offering program - Experienced liquidity events from four portfolio companies
-
Cash of
$86.6 million and credit facility capacity of$269.0 million as ofSeptember 30, 2024 -
Held portfolio of warrant and equity positions in 103 companies as of
September 30, 2024 -
Undistributed spillover income of
$1.27 per share as ofSeptember 30, 2024 -
Subsequent to quarter end, declared distributions of
$0.11 per share payable in January, February andMarch 2025
“We had a solid third quarter, as we originated a number of new, high-quality loans that returned our portfolio to quarter-over-quarter growth, while we saw the venture debt market begin to improve,” said
“We also further strengthened our balance sheet, raising over
Third Quarter 2024 Operating Results
Total investment income for the quarter ended
The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended
Total expenses for the quarter ended
Net investment income for the quarter ended
For the quarter ended
For the quarter ended
Portfolio Summary and Investment Activity
As of
($ in thousands) |
For the Three Months Ended
|
For the Nine Months Ended |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Beginning portfolio |
$ |
646,862 |
|
$ |
715,391 |
|
$ |
709,085 |
|
$ |
720,026 |
|
|
|
|
|
|
||||||||
New debt and equity investments |
|
94,117 |
|
|
89,435 |
|
|
140,751 |
|
|
186,988 |
|
|
|
|
|
|
||||||||
Less refinanced debt balances |
|
(8,290 |
) |
|
(22,500 |
) |
|
(19,540 |
) |
|
(32,500 |
) |
|
|
|
|
|
||||||||
Net new debt and equity investments |
|
85,827 |
|
|
66,935 |
|
|
121,211 |
|
|
154,488 |
|
|
|
|
|
|
||||||||
Principal payments received on investments |
|
(12,502 |
) |
|
(9,121 |
) |
|
(34,805 |
) |
|
(22,011 |
) |
|
|
|
|
|
||||||||
Early pay-offs and principal paydowns |
|
(31,890 |
) |
|
(16,605 |
) |
|
(85,643 |
) |
|
(68,211 |
) |
|
|
|
|
|
||||||||
Payment-in-kind interest on investments |
|
379 |
|
|
3,934 |
|
|
2,114 |
|
|
6,088 |
|
|
|
|
|
|
||||||||
Accretion of debt investment fees |
|
1,474 |
|
|
1,925 |
|
|
4,470 |
|
|
5,018 |
|
|
|
|
|
|
||||||||
New debt investment fees |
|
(1,522 |
) |
|
(1,595 |
) |
|
(2,089 |
) |
|
(2,397 |
) |
|
|
|
|
|
||||||||
Warrants and equity received in settlement of fee income |
|
— |
|
|
80 |
|
|
359 |
|
|
169 |
|
|
|
|
|
|
||||||||
Proceeds from sale of investments |
|
(69 |
) |
|
(2,557 |
) |
|
(157 |
) |
|
(11,063 |
) |
|
|
|
|
|
||||||||
Net realized loss on investments |
|
(33,894 |
) |
|
(11,816 |
) |
|
(31,422 |
) |
|
(28,513 |
) |
|
|
|
|
|
||||||||
Net unrealized appreciation (depreciation) on investments |
|
29,335 |
|
|
(17,518 |
) |
|
864 |
|
|
(24,448 |
) |
|
|
|
|
|
||||||||
Other |
|
— |
|
|
— |
|
|
13 |
|
|
(93 |
) |
|
|
|
|
|
||||||||
Ending portfolio |
$ |
684,000 |
|
$ |
729,053 |
|
$ |
684,000 |
|
$ |
729,053 |
|
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) |
|
|
|
|
|
|||||||||
|
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
|
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 |
10 |
$ |
129,508 |
20.5% |
|
13 |
$ |
167,758 |
27.5% |
|
11 |
$ |
150,367 |
22.4% |
3 |
34 |
|
449,085 |
70.9% |
|
32 |
|
366,945 |
60.3% |
|
39 |
|
452,911 |
67.6% |
2 |
6 |
|
33,465 |
5.3% |
|
4 |
|
26,336 |
4.3% |
|
2 |
|
39,343 |
5.9% |
1 |
3 |
|
21,226 |
3.3% |
|
5 |
|
48,029 |
7.9% |
|
4 |
|
27,551 |
4.1% |
Total |
53 |
$ |
633,284 |
100.0% |
|
54 |
$ |
609,068 |
100.0% |
|
56 |
$ |
670,172 |
100.0% |
As of
As of
Liquidity and Capital Resources
As of
As of
As of
Additionally, as of
During the three months ended
As of
Liquidity Events
During the quarter ended
In July,
In July,
In July,
In July, with the proceeds of a new loan from the Horizon Platform,
Net Asset Value
At
For the quarter ended
Stock Repurchase Program
On
Recent Developments
On
On
On
The Convertible Notes mature on
On
On
On
Monthly Distributions Declared in Fourth Quarter 2024
On
Monthly Distributions
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: |
|
After paying distributions of
When declaring distributions, Horizon’s 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 webcast replay will be available on the Company’s website for 30 days following the call.
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 Horizon’s filings with the
Consolidated Statements of Assets and Liabilities (Dollars in thousands, except share and per share data) |
||||||
|
|
|
|
|
||
|
2024 |
|
2023 |
|
||
|
(unaudited) |
|
|
|
||
Assets |
|
|
|
|
||
Non-affiliate investments at fair value (cost of |
$ |
655,962 |
|
$ |
693,730 |
|
Non-controlled affiliate investments at fair value (cost of |
|
8,307 |
|
|
1,132 |
|
Controlled affiliate investments at fair value (cost of |
|
19,731 |
|
|
14,223 |
|
Total investments at fair value (cost of |
|
684,000 |
|
|
709,085 |
|
Cash |
|
52,302 |
|
|
46,630 |
|
Investments in money market funds |
|
31,080 |
|
|
26,450 |
|
Restricted investments in money market funds |
|
3,266 |
|
|
2,642 |
|
Interest receivable |
|
15,789 |
|
|
13,926 |
|
Other assets |
|
6,637 |
|
3,623 |
|
|
Total assets |
$ |
793,074 |
$ |
802,356 |
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
||
Borrowings |
$ |
433,969 |
|
$ |
462,235 |
|
Distributions payable |
|
12,475 |
|
|
11,011 |
|
Base management fee payable |
|
1,025 |
|
|
1,052 |
|
Other accrued expenses |
|
3,072 |
|
|
4,077 |
|
Total liabilities |
|
450,541 |
|
|
478,375 |
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
||
|
|
|
|
|
||
Net assets |
|
|
|
|
||
Preferred stock, par value
shares issued and outstanding as of |
|
— |
|
|
— |
|
Common stock, par value
37,970,529 and 33,534,854 shares issued and 37,803,064 and 33,367,389 shares outstanding as of |
|
42 |
|
|
36 |
|
Paid-in capital in excess of par |
|
500,345 |
|
|
450,949 |
|
Distributable loss |
|
(157,854 |
) |
|
(127,004 |
) |
Total net assets |
|
342,533 |
|
|
323,981 |
|
Total liabilities and net assets |
$ |
793,074 |
|
$ |
802,356 |
|
Net asset value per common share |
$ |
9.06 |
|
$ |
9.71 |
|
Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share data) |
||||||||||||
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
||||||||
|
|
|
|
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
||||
Investment income |
|
|
|
|
|
|
|
|
||||
From non-affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income |
$ |
22,779 |
|
$ |
23,825 |
|
$ |
71,549 |
|
$ |
75,695 |
|
Fee income |
|
1,382 |
|
|
124 |
|
|
2,661 |
|
|
2,255 |
|
Payment-in-kind income |
|
161 |
|
|
3,777 |
|
|
1,554 |
|
|
5,930 |
|
From non-controlled affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income |
|
— |
|
|
1,246 |
|
|
— |
|
|
1,246 |
|
From controlled affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income |
|
25 |
|
|
8 |
|
|
46 |
|
|
8 |
|
Payment-in-kind income |
|
216 |
|
|
158 |
|
|
560 |
|
|
158 |
|
Total investment income |
|
24,563 |
|
|
29,138 |
|
|
76,370 |
|
|
85,292 |
|
Expenses |
|
|
|
|
|
|
|
|
||||
Interest expense |
|
7,945 |
|
|
7,107 |
|
|
24,046 |
|
|
21,407 |
|
Base management fee |
|
2,989 |
|
|
3,213 |
|
|
9,178 |
|
|
9,621 |
|
Performance based incentive fee |
|
— |
|
|
— |
|
|
295 |
|
|
3,094 |
|
Administrative fee |
|
400 |
|
|
441 |
|
|
1,259 |
|
|
1,249 |
|
Professional fees |
|
587 |
|
|
452 |
|
|
1,707 |
|
|
1,558 |
|
General and administrative |
|
432 |
|
|
392 |
|
|
1,419 |
|
|
1,384 |
|
Total expenses |
|
12,353 |
|
|
11,605 |
|
|
37,904 |
|
|
38,313 |
|
Net investment income before excise tax |
|
12,210 |
|
|
17,533 |
|
|
38,466 |
|
|
46,979 |
|
Provision for excise tax |
|
373 |
|
|
179 |
|
|
1,109 |
|
|
542 |
|
Net investment income |
|
11,837 |
|
|
17,354 |
|
|
37,357 |
|
|
46,437 |
|
Net realized and unrealized loss |
|
|
|
|
|
|
|
|
||||
Net realized loss on non-affiliate investments |
|
(33,894 |
) |
|
(11,816 |
) |
|
(31,459 |
) |
|
(28,513 |
) |
Net realized gain on non-controlled affiliate investments |
|
— |
|
|
— |
|
|
37 |
|
|
— |
|
Net realized loss on investments |
|
(33,894 |
) |
|
(11,816 |
) |
|
(31,422 |
) |
|
(28,513 |
) |
Net unrealized appreciation (depreciation) on non-affiliate investments |
|
35,407 |
|
|
180 |
|
|
(2,094 |
) |
|
(7,656 |
) |
Net unrealized (depreciation) appreciation on non-controlled affiliate investments |
|
(6,237 |
) |
|
(19,055 |
) |
|
8,374 |
|
|
(18,149 |
) |
Net unrealized appreciation (depreciation) on controlled affiliate investments |
|
165 |
|
|
1,357 |
|
|
(5,416 |
) |
|
1,357 |
|
Net unrealized appreciation (depreciation) on investments |
|
29,335 |
|
|
(17,518 |
) |
|
864 |
|
|
(24,448 |
) |
Net realized and unrealized loss |
|
(4,559 |
) |
|
(29,334 |
) |
|
(30,558 |
) |
|
(52,961 |
) |
Net increase (decrease) in net assets resulting from operations |
$ |
7,278 |
|
$ |
(11,980 |
) |
$ |
6,799 |
|
$ |
(6,524 |
) |
Net investment income per common share |
$ |
0.32 |
|
$ |
0.53 |
|
$ |
1.06 |
|
$ |
1.54 |
|
Net increase (decrease) in net assets resulting from operations per common share |
$ |
0.20 |
|
$ |
(0.37 |
) |
$ |
0.19 |
|
$ |
(0.22 |
) |
Distributions declared per share |
$ |
0.33 |
|
$ |
0.33 |
|
$ |
1.04 |
|
$ |
0.99 |
|
Weighted average shares outstanding |
|
36,571,000 |
|
|
32,451,900 |
|
|
35,200,189 |
|
|
30,155,287 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029503067/en/
Investor Relations:
ICR
ir@horizontechfinance.com
(646) 200-8885
Media Relations:
ICR
HorizonPR@icrinc.com
(646) 677-1819
Source: