Second Quarter Highlights:
- Total investment income increased 6% from
$1.3 million for the three months endedMarch 31, 2021 to$1.4 million for the three months endedJune 30, 2021 and by 53% for the comparable period in 2020. 59% of total investment income was generated by the management fees and interest income from our acquisitions of the CLO Platform,Alt-CIF Interval Fund and our minority interest inSierra Crest . - Successfully completed our transaction to become the investment advisor of Capitala Finance Corp. and our strategic minority interest in
Crown Private Credit Partners . - Announced our acquisition of
Ability Insurance Company providing a new platform for growth. - As of
June 30, 2021 , the carrying value of the Company’s portfolio was$51.6 million 1. - Total shareholders’ equity as of
June 30, 2021 was$43.2 million . - The Board of Directors of the Company (the “Board”) declared a cash dividend in the amount of
CAD$0.02 per common share to be paid onSeptember 24, 2021 to shareholders of record onAugust 24, 2021 .
________________________
1 Excludes the Company’s legacy investment in
Update on Operations
Announcement of Agreement to
On
Increase in Ownership of
On
BDC Transaction
On
On
Results of Operations – Three months ended
Total investment income for the three months ended
- CLO Platform –
$0.3 million in management fees Alt-CIF Interval Fund –$0.3 million in interest income and servicing fees- Minority Stake in Sierra Crest –
$0.3 million in equity earnings
Total expenses for the three months ended
Portfolio and Investment Activity
The carrying value of our portfolio was
Carrying value | % of total | Carrying value | % of total | |||||||||||||
Senior Secured Loans | $ | 18,306 | 43.5 | % | $ | 21,761 | 52.7 | % | ||||||||
12,504 | 29.7 | % | 12,504 | 30.3 | % | |||||||||||
Minority Stake in Sierra Crest | 9,567 | 22.8 | % | 7,000 | 17.0 | % | ||||||||||
Equity | 1,684 | 4.0 | % | — | 0.0 | % | ||||||||||
$ | 42,061 | 100.0 | % | $ | 41,265 | 100.0 | % |
For the three months ended
Liquidity and Capital Resources
At
Our consolidated interim financial statements for the six months ended
Dividend Declaration
The Board has declared a cash dividend in the amount of
The declaration and payment by the Company of any future cash dividends, including the amount thereof, will be at the discretion of the Board and will depend on, among other things, the financial condition, capital requirements and earnings of the Company.
Conference Call
We will hold a conference call on
Dial-in Toll Free: | 1-833-756-0867 |
International Dial-in Toll Free: | 1-412-317-5756 |
About
Non-IFRS Financial Measures
This news release makes reference to certain non-IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS financial measures by providing further understanding of the Company’s results of operations from management's perspective. The Company’s definitions of non-IFRS measures used in this news release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The Company has included herein certain non-IFRS supplemental measures of key performance, including, but not limited to, net asset value (“NAV”) per share. We utilize this measure in managing our business, including performance measurement. We believe that providing this performance measure on a supplemental basis is helpful to investors in assessing the overall performance of the Company’s business. However, this measure is not recognized under IFRS. The definitions and calculations of the non-IFRS measures used in this news release are described in greater detail in the Company’s management discussion and analysis for the three months ended
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions "seeks", "expects", "believes", "estimates", "will", “could”, “intends”, "target" and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of the Company regarding future results or events and are based on information currently available to them. Certain material factors and assumptions were applied in providing these forward-looking statements. The forward-looking statements discussed in this release include, but are not limited to, statements relating to the Company’s continued transition to an asset management oriented business model and the entering into of further strategic transactions to diversity the Company’s business and further grow recurring management fee and other income that is long term and permanent in nature, statements regarding the ability of the Company to capitalize on opportunities in the asset management industry, the recurring asset management fees to be derived from Logan Ridge, the use by the Company of Logan Ridge as a platform to grow its asset management business and the ability to scale the business of Logan Ridge through strategic transactions, statements relating to the completion of the acquisition of Ability and the timing and final terms thereof, statements relating to AUM and fee income associated with the acquisition of Ability that would be attributable to the Company, statements relating to the future growth of CPCP and any change in earnings potential for the Company as a result of any growth of CPCP, the temporary nature of the Facility and the timing of the termination and repayment of the Facility, the expected extension of the life of the CLO managed by ML Management, the distribution to the holders of CVRs of proceeds received by the Company in respect of its investment in Cline, the Company’s business strategy, model, approach and future activities, portfolio composition and size, asset management activities and related income, capital raising activities, future credit opportunities of the Company, portfolio realizations, the protection of stakeholder value and the expansion of the Company’s loan portfolio. All forward-looking statements in this press release are qualified by these cautionary statements. The Company believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Company can give no assurance that the actual results or developments will be realized by certain specified dates or at all. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including that the Company has a limited operating history with respect to an asset management oriented business model, there are a number of conditions to the completion of the acquisition of Ability and accordingly the acquisition may not be completed on the terms contemplated or at all, if the acquisition of Ability is completed the risk that Ability may not generate recurring asset management fees or strategically benefit the Company as expected, the risk that the expected synergies by combining the business of Mount Logan with the business of Ability may not be realized as expected, the risk that the Company may not be successful in integrating the business of Ability without significant use of the Company’s resources and management’s attention, , ML Management may cease to be the investment adviser for Logan Ridge and may not enter into further asset management agreements in order to scale and grow its business, the risk that Logan Ridge does not scale and grow its business in a way that provides a significant benefit to the Company, the Company has only a minority interest in Sierra Crest and does not have the ability to affect the control over Sierra Crest or direct the management or policies of Sierra Crest, the risk that Sierra Crest may cease to be the investment adviser to its existing portfolio companies and may not enter into further asset management agreements in order to scale and grow its business, the risk that CPCP does not scale and grow its business in a way that provides a significant benefit to the Company it may take longer than expected to extend the life of the CLO managed by ML Management which could prevent the Company from terminating and repaying the Facility prior to maturity, , and the matters discussed under "Risks Factors" in the most recently filed annual information form and management discussion and analysis for the Company. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. These forward-looking statements are made as of the date of this press release.
This press release is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this release is not, and under no circumstances is it to be construed as, an offer to sell or an offer to purchase any securities in the Company or in any fund or other investment vehicle. This press release is not intended for
For additional information, contact:
Chief Financial Officer
Jason.Roos@mountlogancapital.ca
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(in thousands of
(unaudited) | |||||||||
ASSETS | |||||||||
Investments | $ | 46,178 | $ | 38,219 | |||||
Investment in associates | 9,567 | 7,000 | |||||||
Cash | 4,315 | 6,658 | |||||||
Restricted cash | 5,136 | 17,620 | |||||||
Receivable for investments sold | 1,988 | 15,840 | |||||||
Deferred tax assets | 2,338 | 1,716 | |||||||
Intangible assets, net | 3,254 | 3,496 | |||||||
Other assets | 1,055 | 436 | |||||||
Total assets | $ | 73,831 | $ | 90,985 | |||||
LIABILITIES | |||||||||
Debt | $ | 14,963 | $ | 39,412 | |||||
Payable for investments purchased | 4,898 | 988 | |||||||
Due to affiliates | 2,777 | 403 | |||||||
Payable for equity units purchased | 2,134 | 1,536 | |||||||
Contingent value rights | 4,255 | 3,954 | |||||||
Other liabilities | 1,638 | 1,514 | |||||||
Total liabilities | 30,665 | 47,807 | |||||||
SHAREHOLDERS' EQUITY | |||||||||
Share capital | 93,957 | 93,480 | |||||||
Warrants | 1,086 | 1,086 | |||||||
Contributed surplus | 7,240 | 7,240 | |||||||
Deficit | (37,259 | ) | (36,770 | ) | |||||
Cumulative translation adjustment | (21,858 | ) | (21,858 | ) | |||||
Total shareholders’ equity | 43,166 | 43,178 | |||||||
Total liabilities and shareholders’ equity | $ | 73,831 | $ | 90,985 | |||||
Common shares issued and outstanding | 17,186,593 | 16,963,379 | |||||||
Net asset value per share | $ | 2.51 | $ | 2.55 | |||||
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands of
(unaudited)
Three Months Ended | Six Months Ended | ||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
REVENUE | |||||||||||||
Interest income | $ | 807 | $ | 772 | $ | 1,459 | $ | 1,637 | |||||
Dividend income | 25 | 156 | 137 | 371 | |||||||||
Management fee and other income | 584 | — | 1,150 | — | |||||||||
Total revenue | 1,416 | 928 | 2,746 | 2,008 | |||||||||
EXPENSES | |||||||||||||
Administration fees | 302 | 132 | 544 | 280 | |||||||||
Transaction costs | 389 | — | 505 | — | |||||||||
Amortization of intangible assets | 196 | — | 386 | — | |||||||||
Interest and other credit facility expenses | 237 | 520 | 552 | 1,168 | |||||||||
Professional fees | 559 | 213 | 823 | 428 | |||||||||
Compensation | 63 | 54 | 124 | 110 | |||||||||
Other expenses | 71 | 130 | 211 | 244 | |||||||||
Total expenses | 1,817 | 1,049 | 3,145 | 2,230 | |||||||||
Net income (loss) | (401 | ) | (121 | ) | (399 | ) | (222 | ) | |||||
REALIZED AND UNREALIZED GAIN (LOSS) | |||||||||||||
Net realized gain on investments | 49 | 69 | 207 | 110 | |||||||||
Net realized gain on foreign currency | 2 | (5 | ) | 9 | (4 | ) | |||||||
Net change in unrealized appreciation (depreciation) on investments | (25 | ) | 53 | 145 | (2,213 | ) | |||||||
Net change in unrealized gain on foreign currency | — | (9 | ) | — | 23 | ||||||||
Total net realized and unrealized gain (loss) | 26 | 108 | 361 | (2,084 | ) | ||||||||
Gain (loss) and comprehensive gain (loss) before income tax | (375 | ) | (13 | ) | (38 | ) | (2,306 | ) | |||||
Income tax recovered (expense) | 171 | — | 103 | — | |||||||||
Income (loss) and comprehensive income (loss) | $ | (204 | ) | $ | (13 | ) | $ | 65 | $ | (2,306 | ) | ||
Weighted average shares outstanding – basic and diluted | 17,096,822 | 10,604,998 | 17,030,834 | 10,604,998 | |||||||||
Income (loss) per share – basic and diluted | $ | (0.01 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.22 | ) |
Source:
2021 GlobeNewswire, Inc., source