Apollo Investment Corporation Reports Financial Results for the Quarter Ended September 30, 2019

November 05, 2019

Fiscal Second Quarter and Other Recent Highlights:

  • Net investment income per share for the quarter was $0.53 compared to $0.50 for the quarter ended June 30, 2019
  • Net asset value per share as of the end of the quarter was $18.69 compared to $19.00 as of June 30, 2019
    • $0.22 cents of the decline was from our oil and gas investments due to the decline in the price of oil
    • $0.06 cents of the decline was attributable to the early redemption of our 2043 Notes(1)
  • Continued to successfully execute portfolio growth strategy with core strategies(2) representing 85% of the portfolio(3) as of the end of the quarter
    • Increased first lien debt exposure to 77% of the corporate lending portfolio and reduced second lien debt exposure to 22%(3)
    • Reduced shipping exposure to 5.0% of the portfolio(3)
    • Reduced exposure to Merx Aviation to 12.9% of the portfolio(3)
  • Gross corporate lending commitments made during the quarter totaled $377 million
  • Gross fundings during the quarter totaled $358 million(4) and net fundings totaled $207 million(5)
  • Net leverage(6) as of the end of the quarter was 1.24x, compared to 1.03x as of June 30, 2019
  • Declared a distribution of $0.45 per share
  • Repurchased 0.9 million shares of common stock for an aggregate cost of $14.2 million during the quarter
  • Redeemed $150 million of 6.875% senior unsecured notes due 2043 during the quarter(1)

NEW YORK, Nov. 05, 2019 (GLOBE NEWSWIRE) -- Apollo Investment Corporation (NASDAQ: AINV) or the "Company," or "Apollo Investment," today announced financial results for its second fiscal quarter ended September 30, 2019. The Company's net investment income was $0.53 per share for the quarter ended September 30, 2019, compared to $0.50 per share for the quarter ended June 30, 2019. The Company's net asset value ("NAV") was $18.69 per share as of September 30, 2019, compared to $19.00 as of June 30, 2019.

On November 5, 2019, the Board of Directors declared a distribution of $0.45 per share payable on January 6, 2020 to shareholders of record as of December 20, 2019.

___________________

  1. On August 12, 2019, the Company redeemed $150 million of 6.875% senior unsecured notes due 2043. The Company recognized a realized loss on the extinguishment of these notes of approximately $(4.4) million or $(0.06) per share during the three months ended September 30, 2019.
  2. Core strategies include corporate lending, aviation, life sciences, asset based and lender finance.
  3. On a fair value basis.
  4. Excludes $8 million of gross fundings for Merx Aviation and $111 million of gross fundings for revolvers.
  5. Includes $18 million net repayment from Merx Aviation and $24 million net fundings for revolvers.
  6. 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.

Mr. Howard Widra, Apollo Investment's Chief Executive Officer, commented, "During the quarter, we continued to successfully implement our plan to prudently grow our portfolio. We had a strong origination quarter and grew our portfolio 7% by increasing our exposure to first lien floating rate corporate loans sourced by the Apollo Direct Origination platform. Consistent with our plan, we also successfully reduced our exposure to second lien corporate loans, shipping assets and aircraft leasing.

We believe the shift in the composition of our portfolio and the resultant improvement in our ratios and metrics illustrate that we have meaningfully improved the risk profile of our portfolio." Mr. Widra continued, "The 31 cent net reduction in NAV per share was due in part to a 22 cent decline in the value of our oil and gas investments due to the decline in the price of oil, and a 6 cent loss due to the extinguishment of our 2043 baby bonds."

FINANCIAL HIGHLIGHTS

September

December

September

30,

June 30,

March 31,

31,

30,

($ in billions, except per share data)

2019

2019

2019

2018

2018

Total assets

$

2.89

$

2.70

$

2.50

$

2.38

$

2.39

Investment portfolio (fair value)

$

2.80

$

2.62

$

2.41

$

2.31

$

2.32

Debt outstanding

$

1.58

$

1.35

$

1.13

$

0.99

$

0.95

Net assets

$

1.25

$

1.29

$

1.31

$

1.32

$

1.37

Net asset value per share

$

18.69

$

19.00

$

19.06

$

19.03

$

19.40

Debt-to-equity ratio

1.26x

1.05x

0.86x

0.76x

0.69x

Net leverage ratio (1)

1.24x

1.03x

0.83x

0.74x

0.68x

___________________

  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

Six Months Ended

September 30,

September 30,

(in millions)*

2019

2018

2019

2018

Investments made in portfolio companies

$

476.7

$

363.6

$

912.0

$

722.5

Investments sold

(20.0)

(163.2)

(29.6)

(178.1)

Net activity before repaid investments

456.7

200.3

882.4

544.4

Investments repaid

(249.7)

(372.1)

(460.4)

(465.8)

Net investment activity

$

207.1

$

(171.7)

$

422.1

$

78.6

Portfolio companies at beginning of period

129

96

113

90

Number of new portfolio companies

14

9

35

16

Number of exited portfolio companies

(4)

(7)

(9)

(8)

Portfolio companies at end of period

139

98

139

98

Number of investments made in existing portfolio companies

48

16

54

24

____________________

* Totals may not foot due to rounding.

OPERATING RESULTS

Three Months Ended

Six Months Ended

September 30,

September 30,

(in millions)*

2019

2018

2019

2018

Net investment income

$

35.7

$

32.2

$

70.3

$

63.7

Net realized and change in unrealized gains (losses)

(28.7)

(4.1)

(39.4)

(22.4)

Net increase in net assets resulting from operations

$

7.1

$

28.0

$

30.9

$

41.3

(per share)* (1)

Net investment income on per average share basis

$

0.53

$

0.45

$

1.03

$

0.89

Net realized and change in unrealized gain (loss) per share

(0.43)

(0.06)

(0.58)

(0.31)

Earnings per share - basic

$

0.10

$

0.39

$

0.45

$

0.58

____________________

* 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 September 30, 2019, the Company repurchased 880,001 shares at a weighted average price per share of $16.15, inclusive of commissions, for a total cost of $14.2 million. During the period from October 1, 2019 through November 4, 2019, the Company repurchased 501,611 shares at a weighted average price per share of $15.65 inclusive of commissions, for a total cost of $7.8 million. Since the inception of the share repurchase program and through November 4, 2019, the Company repurchased 12,368,013 shares at a weighted average price per share of $16.83, inclusive of commissions, for a total cost of $208.1 million, leaving a maximum of $41.9 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 EST ON NOVEMBER 5, 2019

The Company will host a conference call on Tuesday, November 5, 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 #5252608 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 November 26, 2019 by dialing (800) 585-8367; international callers please dial (404) 537- 3406, reference Conference ID #5252608. 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 average yields as of September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 30, 2018, were as follows:

September

December

September

30,

June 30,

March 31,

31,

30,

2019

2019

2019

2018

2018

Portfolio composition, at fair value:

First lien secured debt

74%

69%

66%

64%

57%

Second lien secured debt

17%

21%

23%

24%

27%

Total secured debt

91%

90%

89%

88%

84%

Unsecured debt

-

-

-

-

3%

Structured products and other

2%

2%

2%

3%

3%

Preferred equity

1%

1%

1%

1%

1%

Common equity/interests and warrants

6%

7%

8%

8%

9%

Weighted average yields, at amortized cost (1):

First lien secured debt (2)

9.0%

9.3%

9.9%

10.4%

10.4%

Second lien secured debt (2)

11.0%

11.3%

11.4%

11.4%

11.2%

Total secured debt (2)

9.4%

9.8%

10.2%

10.7%

10.7%

Unsecured debt portfolio (2)

-

-

-

-

11.0%

Total debt portfolio (2)

9.4%

9.8%

10.2%

10.7%

10.7%

Total portfolio (3)

8.9%

9.2%

9.6%

9.6%

9.7%

Interest rate type, at fair value (4):

Fixed rate amount

-

-

-

-

$0.1 billion

Floating rate amount

$2.0billion

$1.8 billion

$1.5 billion

$1.4 billion

$1.3 billion

Fixed rate, as percentage of total

-

1%

-

-

6%

Floating rate, as percentage of total

100%

99%

100%

100%

94%

Interest rate type, at amortized cost (4):

Fixed rate amount

-

-

-

-

$0.1 billion

Floating rate amount

$2.0billion

$1.8 billion

$1.5 billion

$1.4 billion

$1.3 billion

Fixed rate, as percentage of total

-

1%

-

-

6%

Floating rate, as percentage of total

100%

99%

100%

100%

94%

(1) An investor's yield may be lower than the portfolio yield due to sales loads and other expenses.

  1. Exclusive of investments on non-accrual status.
  2. Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status.
  3. The interest rate type information is calculated using the Company's corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status.

APOLLO INVESTMENT CORPORATION

STATEMENTS OF ASSETS AND LIABILITIES

(In thousands, except share and per share data)

September

30,

March 31,

2019

2019

(Unaudited)

Assets

Investments at fair value:

Non-controlled/non-affiliated investments (cost - $2,159,801 and $1,654,322, respectively) $

2,121,375

$

1,627,406

Non-controlled/affiliated investments (cost - $67,304 and $67,072, respectively)

49,164

49,681

Controlled investments (cost - $662,657 and $736,717, respectively)

634,221

731,045

Cash and cash equivalents

31,637

36,280

Foreign currencies (cost - $4,860 and $4,963, respectively)

4,801

4,909

Receivable for investments sold

269

336

Interest receivable

28,692

24,280

Dividends receivable

4,381

3,748

Deferred financing costs

17,693

19,776

Prepaid expenses and other assets

729

336

Total Assets

$

2,892,962

$

2,497,797

Liabilities

Debt

$

1,584,128

$

1,128,686

Payable for investments purchased

-

677

Distributions payable

30,171

31,040

Management and performance-based incentive fees payable

12,101

8,880

Interest payable

3,666

5,818

Accrued administrative services expense

2,354

2,983

Other liabilities and accrued expenses

7,150

7,086

Total Liabilities

$

1,639,570

$

1,185,170

Net Assets

$

1,253,392

$

1,312,627

Net Assets

Common stock, $0.001 par value (130,000,000 and 400,000,000 shares authorized;

67,047,352 and 68,876,986 shares issued and outstanding, respectively)

$

67

$

69

Capital in excess of par value

2,126,502

2,155,836

Accumulated under-distributed(over-distributed) earnings

(873,177)

(843,278)

Net Assets

$

1,253,392

$

1,312,627

Net Asset Value Per Share

$

18.69

$

19.06

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Apollo Investment Corporation published this content on 05 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 November 2019 21:09:05 UTC