8-K
false000150461900015046192023-11-152023-11-15

 

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 

 

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

 Securities Exchange Act of 1934

 

Date of Report: November 15, 2023

 (Date of earliest event reported)

 

PennantPark Floating Rate Capital Ltd.

 (Exact name of registrant as specified in its charter)

 

Maryland

(State or Other Jurisdiction of Incorporation)

814-00891

(Commission File Number)

27-3794690

(IRS Employer Identification Number)

 

1691 Michigan Avenue

Miami Beach, Florida

(Address of Principal Executive Offices)

33139

(Zip Code)

 

(786) 297-9500

(Registrant's telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

PFLT

The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition

 

On November 15, 2023, PennantPark Floating Rate Capital Ltd., or the Company, issued a press release announcing its financial results for the fourth fiscal quarter ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report pursuant to Item 2.02 on Form 8-K and Regulation FD. A copy of the Company's schedule of investments as of September 30, 2023 and 2022 are furnished as Exhibit 99.2 to this report pursuant to Item 2.02 on Form 8-K and Regulation FD.

 

 The Company is completing its assessment of the effectiveness of its internal control over financial reporting as of September 30, 2023. Based on currently available information, the Company expects to report certain material weaknesses in internal control over financial reporting in Item 9A of its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “2023 Annual Report”). The material weaknesses identified to date relate to the control environment over the Company’s review process of its cash and par reconciliations and its interest income analysis. The material weaknesses are not expected to impact the accuracy of the Company’s financial statements to be reported in the 2023 Annual Report. Because the Company has not completed the preparation of its consolidated financial statements for the year ended September 30, 2023, the preliminary unaudited results presented in the press release as of and for the fourth quarter and year ended September 30, 2023 are based on current expectations and are subject to adjustment.

 

The information in this report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of such section. The information in this report on Form 8-K shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Act, or under the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Forward-Looking Statements

 

This report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports the Company files under the Exchange Act. All statements other than statements of historical facts included in this report on Form 8-K are forward-looking statements and are not guarantees of future performance 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 filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

 

The Company may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from its historical experience and present expectations.

 

Item 9.01. Financial Statements and Exhibits

 

(a) Financial statements:

             None

(b) Pro forma financial information:

             None

(c) Shell company transactions:

             None

(d) Exhibits

             99.1 Press Release of PennantPark Floating Rate Capital Ltd. dated November 15, 2023

   99.2 Schedule of Investments as of September 30, 2023 and 2022

    104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 

SIGNATURE

 

 

 


Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: November 15, 2023

 

PENNANTPARK FLOATING RATE CAPITAL LTD.

 

By:  /s/ Richard T. Allorto, Jr.

      Richard T. Allorto, Jr.

Chief Financial Officer & Treasurer

 

 

 

 

 

 

 

 

 

 

 

 


EX-99.1

EXHIBIT 99.1

https://cdn.kscope.io/3560262f892d3fa8e27dab626611d82a-img78587047_0.jpg
 

PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Fourth Quarter and Fiscal Year Ended September 30, 2023

 

Miami, FL (GLOBE NEWSWIRE November 15, 2023) PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) (TASE: PFLT) announced today financial results for the fourth quarter and fiscal year ended September 30, 2023.

 

HIGHLIGHTS

Quarter ended September 30, 2023 (Unaudited)

($ in millions, except per share amounts)

 

Assets and Liabilities:

 

 

 

 

 

 

Investment portfolio (1)

 

 

 

 

$

1,067.2

 

Net assets

 

 

 

 

$

653.6

 

GAAP net asset value per share

 

 

 

 

$

11.13

 

Quarterly increase in GAAP net asset value per share

 

 

 

 

 

1.6

%

Adjusted net asset value per share (2)

 

 

 

 

$

11.13

 

Quarterly increase in adjusted net asset value per share (2)

 

 

 

 

 

1.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Facility

 

 

 

 

$

9.4

 

2023 Notes

 

 

 

 

$

76.2

 

2026 Notes

 

 

 

 

$

183.1

 

2031 Asset-Backed Debt

 

 

 

 

$

226.8

 

Regulatory Debt to Equity

 

 

 

 

0.76x

 

Weighted average yield on debt investments at quarter-end

 

 

 

 

 

12.6

%

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Year Ended

 

 

 

September 30, 2023

 

 

September 30, 2023

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

Operating Results:

 

 

 

 

 

 

Net investment income

 

$

18.5

 

 

$

67.5

 

Net investment income per share (GAAP)

 

$

0.32

 

 

$

1.33

 

Core net investment income per share (3)

 

$

0.32

 

 

$

1.27

 

Distributions declared per share

 

$

0.31

 

 

$

1.19

 

 

 

 

 

 

 

 

Portfolio Activity:

 

 

 

 

 

 

Purchases of investments

 

$

93.5

 

 

$

324.5

 

Sales and repayments of investments

 

$

141.0

 

 

$

399.1

 

 

 

 

 

 

 

 

PSSL Portfolio data:

 

 

 

 

 

 

PSSL investment portfolio

 

$

785.9

 

 

$

785.9

 

Purchases of investments

 

$

52.5

 

 

$

190.9

 

Sales and repayments of investments

 

$

76.4

 

 

$

155.2

 

 

(1)
Includes investments in PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture, totaling $261.0 million, at fair value.
(2)
This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance including the impact of the unrealized amounts on the Credit Facility and the 2023 Notes. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
(3)
Core net investment income (“Core NII”) is a non-GAAP financial measure. The Company believes that Core NII provides useful information to investors and management because it reflects the Company's financial performance excluding one-time or non-recurring investment income and expenses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the year ended September 30, 2023, Core NII excluded: i) $3.7 million or $0.07 per share, of dividend income related to our equity investment in Dominion Voting Systems; and ii) an add back of $0.7 million or $0.01 per share, of incentive fee expense.

 

 

 


CONFERENCE CALL AT 9:00 A.M. ET ON NOVEMBER 16, 2023

The Company will also host a conference call at 9:00 a.m. (Eastern Time) on Thursday, November 16, 2023 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (888) 204-4368 approximately 5-10 minutes prior to the call. International callers should dial (646) 828-8193. All callers should reference conference ID #3662054 or PennantPark Floating Rate Capital Ltd. An archived replay will also be available on a webcast link located on the Quarterly Earnings page in the Investor section of PennantPark’s website.

PORTFOLIO AND INVESTMENT ACTIVITY

“We are pleased to have another quarter of solid performance from both a NAV and net investment income perspective. We also are in a position to take advantage of this excellent vintage of loans in the core middle market,” said Art Penn, Chairman and CEO. “We believe that we have a visible pathway of driving meaningfully increased income through the growing balance sheets of PFLT and our PSSL joint venture.”

As of September 30, 2023, our portfolio totaled $1,067.2 million and consisted of $906.2 million of first lien secured debt (including $210.1 million in PSSL), $0.1 million of second lien secured debt and $160.9 million of preferred and common equity (including $50.9 million in PSSL). Our debt portfolio consisted of approximately 100% variable-rate investments. As of September 30, 2023, we had three portfolio companies on non-accrual, representing 0.9% and 0.2% of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2023, the portfolio had net unrealized depreciation of $25.7 million. Our overall portfolio consisted of 131 companies with an average investment size of $8.1 million, and a weighted average yield on debt investments of 12.6%.

As of September 30, 2022, our portfolio totaled $1,164.3 million and consisted of $1,009.6 million of first lien secured debt (including $190.2 million in PSSL), $0.1 million of second lien secured debt and $154.5 million of preferred and common equity (including $49.4 million in PSSL). Our debt portfolio consisted of 100% variable-rate investments. As of September 30, 2022, we had two portfolio companies on non-accrual, representing 0.9% and zero percent of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2022, the portfolio had net unrealized depreciation of $13.1 million. Our overall portfolio consisted of 125 companies with an average investment size of $9.3 million and a weighted average yield on debt investments of 10.0%.

 

For the three months ended September 30, 2023, we invested $93.5 million in three new and 31 existing portfolio companies with a weighted average yield on debt investments of 12.1%. Sales and repayments of investments for the same period totaled $141.0 million. This compares to the three months ended September 30, 2022, in which we invested $54.7 million in five new and 25 existing portfolio companies with a weighted average yield on debt investments of 8.9%. Sales and repayments of investments for the same period totaled $98.0 million.

 

For the year ended September 30, 2023, we invested $324.5 million in 16 new and 71 existing portfolio companies with a weighted average yield on debt investments of 12.1%. Sales and repayments of investments for the same period totaled $399.1 million.

 

For the year ended September 30, 2022, we invested $607.8 million in 34 new and 129 existing portfolio companies with a weighted average yield on debt investments of 7.8%. Sales and repayments of investments for the same period totaled $495.2 million.

 

PennantPark Senior Secured Loan Fund I LLC

As of September 30, 2023, PSSL’s portfolio totaled $785.9 million, consisted of 105 companies with an average investment size of $7.5 million and had a weighted average yield on debt investments of 12.1%. As of September 30, 2022, PSSL’s portfolio totaled $754.7 million, consisted of 95 companies with an average investment size of $8.0 million and had a weighted average yield on debt investments of 9.6%.

For the three months ended September 30, 2023, PSSL invested $52.5 million in five new and eight existing portfolio companies with a weighted average yield on debt investments of 12.0%. PSSL’s sales and repayments of investments for the same period totaled $76.4 million. For the three months ended September 30, 2022, PSSL invested $50.2 million in nine new and five existing portfolio companies with a weighted average yield on debt investments of 8.8%. PSSL’s sales and repayments of investments for the same period totaled $33.2 million.

For the year ended September 30, 2023, PSSL invested $190.9 million (of which $158.2 million was purchased from the Company) in 22 new and 27 existing portfolio companies with a weighted average yield on debt investments of 11.8%. PSSL’s sales and repayments of investments for the same period totaled $155.2 million.
 

For the year ended September 30, 2022, PSSL invested $278.8 million (of which $270.6 million was purchased from the Company) in 34 new and 20 existing portfolio companies with a weighted average yield on debt investments of 8.1%. PSSL’s sales and repayments of investments for the same period totaled $102.4 million.

 

 


 

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three months and years ended September 30, 2023 and 2022.

 

Investment Income

 

For the three months and year ended September 30, 2023, investment income was $35.7 million and $139.3 million, respectively, and was attributable to $31.4 million and $120.0 million from first lien secured debt, zero and $0.02 million from second lien secured debt, and $4.3 million and $19.3 million from preferred and common equity, respectively. For the three months and year ended September 30, 2022, investment income was $28.8 million and $105.5 million, respectively, and was attributable to $25.1 million and $89.1 million from first lien secured debt, zero and $0.2 million from second lien secured debt, and $3.7 million and $16.2 million from preferred and common equity, respectively. The increase in investment income compared to the same periods in the prior year was primarily due to an increase in the SOFR index.

 

Expenses

 

For the three months and year ended September 30, 2023, expenses totaled $17.2 million and $71.8 million, respectively, and were comprised of $8.6 million and $38.2 million of debt related interest and expenses, $2.8 million and $11.4 million of base management fees, $4.6 million and $16.9 million of incentive fees, $1.1 million and $4.4 million of general and administrative expenses and $0.2 million and $1.0 million of provision for excise taxes. For the three months and years ended September 30, 2022, expenses totaled $16.1 million and $56.9 million, respectively, and were comprised of $9.0 million (including $0.4 million attributable to fees associated with entering into the new credit facility) and $29.8 million (including $0.4 million attributable to fees associated with entering into the new credit facility) of debt related interest and expenses, $3.0 million and $11.9 million of base management fees, $3.2 million and $11.6 million of incentive fees, $0.8 million and $3.2 million of general and administrative expenses and $0.1 million and $0.4 million of provision for excise taxes, respectively. The increase in expenses over the prior year was primarily due to an increase in debt related interest and other financing expenses and an increase in incentive fees.

 

 

Net Investment Income

 

For the three months and year ended September 30, 2023, net investment income totaled $18.5 million and $67.5 million, or $0.32 per share and $1.33 per share, respectively. For the three months and year ended September 30, 2022, net investment income totaled $12.7 million and $48.6 million, or $0.29 per share and $1.18 per share, respectively. The increase in net investment income per share compared to the prior year was primarily due to an increase in investment income.

 

Net Realized Gains or Losses


 

For the three months and years ended September 30, 2023, net realized gains (losses) on investments including provision for taxes totaled $(2.3) million and $(16.2) million, respectively. For the three months and years ended September 30, 2022 net realized gains (losses) totaled $0.5 million and $(11.1) million, respectively. The change in realized gains (losses) was primarily due to changes in market conditions of our investments and the values at which they were realized, caused by the fluctuations in the market and in the economy.


 

Unrealized Appreciation or Depreciation on Investments, the Credit Facility and the 2023 Notes

 

For the three months ended and year ended September 30, 2023, net change in unrealized appreciation (depreciation) on investments was $9.5 million and $(12.6) million, respectively. For the three months and year ended September 30, 2022, net change in unrealized appreciation (depreciation) on investments was $(20.9) million and $(24.5) million, respectively. As of September 30, 2023 and September 30, 2022, our net unrealized appreciation (depreciation) on investments totaled $(25.7) million and $(13.1) million, respectively. The net change in unrealized appreciation or depreciation on our investments for the year ended September 30, 2023 compared to the prior year was primarily due to changes in the capital market conditions of our investments and the values at which they were realized, caused by the fluctuations in the market and in the economy, as discussed above under the "Forward-Looking Statements".

For the three months and year ended September 30, 2023, our Credit Facility and 2023 Notes had a net change in unrealized (appreciation) depreciation of $2.6 million and $(2.3) million, respectively. For the three months and years ended September 30, 2022, the Credit Facility or our Prior Credit Facility, as applicable, and 2023 Notes had a net change in unrealized (appreciation) depreciation of $(6.2) million and $(4.9) million, respectively. As of September 30, 2023 and September 30, 2022, the net unrealized depreciation on the Credit Facility or our Prior Credit Facility, as applicable, and the 2023 Notes totaled zero and $2.3 million, respectively. The net


change in unrealized appreciation or depreciation compared to the same periods in the prior year was primarily due to changes in the capital markets.
 

 

 

 

Net Change in Net Assets Resulting from Operations

 

For the three months and year ended September 30, 2023, net increase (decrease) in net assets resulting from operations totaled $28.0 million and $39.3 million, or $0.48 per share and $0.77 per share, respectively. For the three months and year ended September 30, 2022, net increase (decrease) in net assets resulting from operations totaled $(13.1) million and $3.5 million, or $(0.34) and $0.08 per share, respectively. The increase or decrease for the year ended September 30, 2023 compared to the prior year was primarily due to a decrease in depreciation of the portfolio primarily driven by changes in market conditions.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources are derived primarily from proceeds of securities offerings, debt capital and cash flows from operations, including investment sales and repayments, and income earned. Our primary use of funds from operations includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives.

As of September 30, 2023 and 2022, we had $9.4 million and $168.8 million in outstanding borrowings under the Credit Facility, respectively, and the weighted average interest rate was 7.7% and 4.9%, respectively. As of September 30, 2023 and 2022, we had $376.6 million and $197.2 million of unused borrowing capacity under the Credit Facility, respectively, subject to leverage and borrowing base restrictions.

As of September 30, 2023 and 2022, we had cash equivalents of $100.0 million and $47.9 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to allow us to efficiently operate the business.

For the year ended September 30, 2023, our operating activities provided cash of $143.6 million and our financing activities used cash of $(91.5) million. Our operating activities provided cash primarily due to our investment activities and our financing activities used cash primarily to fund repayments under the Credit Facility.

For the year ended September 30, 2022, our operating activities used cash of $50.0 million, and our financing activities provided cash of $47.7 million. Our operating activities used cash primarily for our investment activities and our financing activities provided cash primarily from public offering proceeds and the 2026 notes issuance.

DISTRIBUTIONS

During the three months and year ended September 30, 2023, we declared distributions of $0.31 and $1.19 per share, respectively, for total distributions of $18.1 million and $60.5 million, respectively. During the three months and year ended September 30, 2022, we declared distributions of $0.29 and $1.14 per share, respectively, for total distributions of $12.6 million and $46.7 million, respectively. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the SEC.

RECENT DEVELOPMENTS

For the period subsequent to September 30, 2023 through November 10, 2023 we invested $76.2 million in four new and 17 existing portfolio companies at a weighted average yield on debt investments of 11.8%.

 

AVAILABLE INFORMATION

The Company makes available on its website its Annual Report on Form 10-K filed with the SEC, and stockholders may find such report on its website at www.pennantpark.com.

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except per share data)

 

 

September 30, 2023

 

 

 

 

 

 

(Unaudited)

 

 

September 30, 2022

 

Assets

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

Non-controlled, non-affiliated investments (cost—$768,240 and $882,570, respectively)

 

$

772,178

 

 

$

893,249

 

Controlled, affiliated investments (cost— $324,639 and $294,787, respectively)

 

 

294,996

 

 

 

271,005

 

Total of investments (cost—$1,092,878 and $1,177,357, respectively)

 

 

1,067,174

 

 

 

1,164,254

 

Cash and cash equivalents (cost—$99,989 and $47,917, respectively)

 

 

99,989

 

 

 

47,880

 

Interest receivable

 

 

10,423

 

 

 

7,543

 

Receivable for investments sold

 

 

 

 

 

3,441

 

Distribution receivable

 

 

565

 

 

 

 

Prepaid expenses and other assets

 

 

894

 

 

 

748

 

Total assets

 

 

1,179,046

 

 

 

1,223,866

 

Liabilities

 

 

 

 

 

 

Distributions payable

 

 

6,020

 

 

 

4,308

 

Payable for investments purchased

 

 

4,905

 

 

 

 

Credit Facility payable, at fair value (cost—$9,400 and $168,830, respectively)

 

 

9,400

 

 

 

167,563

 

2023 Notes payable, at fair value (par—$76,219 and $97,006, respectively)

 

 

76,219

 

 

 

96,812

 

2026 Notes payable, net (par—$185,000)

 

 

183,054

 

 

 

182,276

 

2031 Asset-Backed Debt, net (par—$228,000)

 

 

226,759

 

 

 

226,128

 

Interest payable on debt

 

 

8,615

 

 

 

8,163

 

Base management fee payable

 

 

2,759

 

 

 

3,027

 

Performance-based incentive fee payable

 

 

4,628

 

 

 

3,164

 

Accrued other expenses

 

 

1,286

 

 

 

765

 

Deferred tax liability

 

 

1,794

 

 

 

4,568

 

Total liabilities

 

 

525,441

 

 

 

696,774

 

Commitments and contingencies

 

 

 

 

 

 

Net assets

 

 

 

 

 

 

Common stock, 58,734,702 and 45,345,638 shares issued and outstanding, respectively
   Par value $0.001 per share and 100,000,000 shares authorized

 

 

59

 

 

 

45

 

Paid-in capital in excess of par value

 

 

765,187

 

 

 

618,028

 

Accumulated deficit

 

 

(111,641

)

 

 

(90,981

)

Total net assets

 

$

653,605

 

 

$

527,092

 

Total liabilities and net assets

 

$

1,179,046

 

 

$

1,223,866

 

Net asset value per share

 

$

11.13

 

 

$

11.62

 

 

 


PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

Three Months Ended
September 30,

 

 

Year Ended
September 30,

 

 

 

2023 (Unaudited)

 

 

2022

 

 

2023 (Unaudited)

 

 

2022

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

From non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

23,209

 

 

$

18,660

 

 

$

88,649

 

 

$

68,413

 

Dividend

 

 

677

 

 

 

577

 

 

 

6,279

 

 

 

2,308

 

Other income

 

 

439

 

 

 

483

 

 

 

1,899

 

 

 

4,278

 

From non-controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

 

 

 

112

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

From controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

8,346

 

 

 

6,091

 

 

 

31,047

 

 

 

16,724

 

Dividend

 

 

3,063

 

 

 

2,975

 

 

 

11,463

 

 

 

13,650

 

Other Income

 

 

 

 

 

 

 

 

 

 

 

 

Total investment income

 

 

35,734

 

 

 

28,786

 

 

 

139,337

 

 

 

105,485

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Base management fee

 

 

2,759

 

 

 

3,026

 

 

 

11,402

 

 

 

11,930

 

Performance-based incentive fee

 

 

4,628

 

 

 

3,164

 

 

 

16,873

 

 

 

11,625

 

Interest and expenses on debt

 

 

8,571

 

 

 

9,042

 

 

 

38,166

 

 

 

29,755

 

Administrative services expenses

 

 

235

 

 

 

144

 

 

 

999

 

 

 

575

 

Other general and administrative expenses

 

 

877

 

 

 

654

 

 

 

3,422

 

 

 

2,618

 

Expenses before provision for taxes

 

 

17,070

 

 

 

16,030

 

 

 

70,862

 

 

 

56,503

 

Credit Facility amendment costs and debt issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

Provision for taxes

 

 

150

 

 

 

100

 

 

 

984

 

 

 

400

 

Net expenses

 

 

17,220

 

 

 

16,130

 

 

 

71,846

 

 

 

56,903

 

Net investment income

 

 

18,514

 

 

 

12,656

 

 

 

67,491

 

 

 

48,582

 

Realized and unrealized gain (loss) on investments and debt:

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) on investments and debt:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(2,372

)

 

 

515

 

 

 

(15,892

)

 

 

11,209

 

Non-controlled and controlled, affiliated investments

 

 

 

 

 

 

 

 

 

 

 

(22,315

)

Provision for taxes on realized gain on investments

 

 

37

 

 

 

 

 

 

(263

)

 

 

 

Net realized gain (loss) on investments and debt

 

 

(2,335

)

 

 

515

 

 

 

(16,155

)

 

 

(11,106

)

Net change in unrealized appreciation (depreciation) on:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

5,497

 

 

 

(9,766

)

 

 

(6,707

)

 

 

(22,009

)

Non-controlled and controlled, affiliated investments

 

 

3,967

 

 

 

(11,100

)

 

 

(5,858

)

 

 

(2,503

)

Provision for taxes on unrealized appreciation on investments

 

 

(155

)

 

 

772

 

 

 

2,774

 

 

 

(4,568

)

Debt (appreciation) depreciation

 

 

2,558

 

 

 

(6,216

)

 

 

(2,284

)

 

 

(4,943

)

Net change in unrealized appreciation (depreciation) on investments and debt

 

 

11,867

 

 

 

(26,310

)

 

 

(12,075

)

 

 

(34,023

)

Net realized and unrealized gain (loss) from investments and debt

 

 

9,532

 

 

 

(25,795

)

 

 

(28,230

)

 

 

(45,129

)

Net increase (decrease) in net assets resulting from operations

 

 

28,046

 

 

 

(13,139

)

 

$

39,261

 

 

$

3,453

 

Net increase (decrease) in net assets resulting from operations per common share

 

$

0.48

 

 

$

(0.34

)

 

$

0.77

 

 

$

0.08

 

Net investment income per common share

 

$

0.32

 

 

$

0.29

 

 

$

1.33

 

 

$

1.18

 

 

 

 


 

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

 

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

 

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

 

PennantPark Investment Advisers, LLC is a leading middle-market credit platform, managing $6.8 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle-market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, and Los Angeles.

FORWARD-LOOKING STATEMENTS AND OTHER

 

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance 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 filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

We may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations.

The Company is completing its assessment of the effectiveness of its internal control over financial reporting as of September 30, 2023. Based on currently available information, the Company expects to report certain material weaknesses in internal control over financial reporting in Item 9A of its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “2023 Annual Report”). The material weaknesses identified to date relate to the control environment over the Company’s review process of its cash and par reconciliations and its interest income analysis. The material weaknesses are not expected to impact the accuracy of the Company’s financial statements to be reported in the 2023 Annual Report. Because the Company has not completed the preparation of its consolidated financial statements for the year ended September 30, 2023, the preliminary unaudited results presented in the press release as of and for the fourth quarter and year ended September 30, 2023 are based on current expectations and are subject to adjustment.

 

CONTACT:

Richard T. Allorto, Jr.

 

PennantPark Floating Rate Capital Ltd.

 

(212) 905-1000

 

www.pennantpark.com

 


EX-99.2

EXHIBIT 99.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2023

(Unaudited)

(in thousands, except share data)

Issuer Name

 

Maturity

 

Industry

 

Current
 Coupon

 

 

Basis Point
 Spread
 Above
 Index
(1)

 

 

Par /
 Shares

 

 

Cost

 

 

Fair Value (2)

 

Investments in Non-Controlled, Non-Affiliated Portfolio Companies—118.1% (3), (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Secured Debt—101.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A1 Garage Merger Sub, LLC

 

12/22/2028

 

Commercial Services & Supplies

 

 

11.99

%

 

3M SOFR+660

 

 

 

1,520

 

 

$

1,499

 

 

$

1,512

 

A1 Garage Merger Sub, LLC - Unfunded Term Loan

 

12/22/2028

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

528

 

 

 

 

 

 

5

 

A1 Garage Merger Sub, LLC LLC (Revolver) (7), (9)

 

12/22/2028

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

748

 

 

 

 

 

 

(4

)

Ad.net Acquisition, LLC

 

05/07/2026

 

Media

 

 

11.65

%

 

3M SOFR+626

 

 

 

4,888

 

 

 

4,846

 

 

 

4,863

 

Ad.net Acquisition, LLC (Revolver) (7)

 

05/07/2026

 

Media

 

 

11.65

%

 

3M SOFR+626

 

 

 

622

 

 

 

622

 

 

 

619

 

Ad.net Acquisition, LLC (Revolver) (7), (9)

 

05/07/2026

 

Media

 

 

 

 

 

 

 

 

622

 

 

 

 

 

 

(3

)

Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)

 

06/10/2025

 

Media

 

 

11.79

%

 

3M SOFR+640

 

 

 

13,958

 

 

 

13,859

 

 

 

13,749

 

Anteriad, LLC (f/k/a MeritDirect, LLC)

 

05/23/2024

 

Media

 

 

11.04

%

 

3M SOFR+565

 

 

 

13,786

 

 

 

13,755

 

 

 

13,545

 

Anteriad, LLC (f/k/a MeritDirect, LLC) - Incremental Term Loan

 

05/23/2024

 

Media

 

 

12.04

%

 

3M SOFR+665

 

 

 

2,212

 

 

 

2,186

 

 

 

2,184

 

Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7), (9)

 

05/23/2024

 

Media

 

 

 

 

 

 

 

 

2,869

 

 

 

 

 

 

(50

)

Any Hour Services

 

07/21/2027

 

Energy Equipment and Services

 

 

11.22

%

 

3M SOFR+585

 

 

 

6,395

 

 

 

6,326

 

 

 

6,267

 

Any Hour Services (Revolver) (7), (9)

 

07/21/2027

 

Energy Equipment and Services

 

 

 

 

 

 

 

 

1,147

 

 

 

 

 

 

(23

)

Apex Service Partners, LLC

 

07/31/2025

 

Diversified Consumer Services

 

 

10.52

%

 

3M SOFR+525

 

 

 

6,160

 

 

 

6,132

 

 

 

6,145

 

Apex Service Partners, LLC Term Loan B

 

07/31/2025

 

Diversified Consumer Services

 

 

11.04

%

 

3M SOFR+550

 

 

 

294

 

 

 

294

 

 

 

294

 

Apex Service Partners, LLC Term Loan C

 

07/31/2025

 

Diversified Consumer Services

 

 

10.68

%

 

3M SOFR+525

 

 

 

12,826

 

 

 

12,732

 

 

 

12,793

 

Apex Service Partners, LLC (Revolver) (7)

 

07/31/2025

 

Diversified Consumer Services

 

 

10.86

%

 

3M SOFR+525

 

 

 

1,153

 

 

 

1,153

 

 

 

1,150

 

Apex Service Partners, LLC (Revolver) (7), (9)

 

07/31/2025

 

Diversified Consumer Services

 

 

 

 

 

 

 

 

692

 

 

 

 

 

 

(2

)

Applied Technical Services, LLC

 

12/29/2026

 

Commercial Services & Supplies

 

 

11.54

%

 

3M SOFR+615

 

 

 

8,891

 

 

 

8,784

 

 

 

8,714

 

Applied Technical Services, LLC (Unfunded Term Loan)

 

12/29/2026

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

582

 

 

 

 

 

 

(6

)

Applied Technical Services, LLC (Revolver) (7)

 

12/29/2026

 

Commercial Services & Supplies

 

 

13.25

%

 

3M SOFR+475

 

 

 

509

 

 

 

509

 

 

 

499

 

Applied Technical Services, LLC (Revolver) (7), (9)

 

12/29/2026

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

764

 

 

 

 

 

 

(15

)

Arcfield Acquisition Corp.

 

08/03/2029

 

Aerospace and Defense

 

 

11.62

%

 

1M SOFR+625

 

 

 

6,526

 

 

 

6,429

 

 

 

6,461

 

Arcfield Acquisition Corp. (Revolver) (9)

 

08/04/2028

 

Aerospace and Defense

 

 

 

 

 

 

 

 

1,379

 

 

 

 

 

 

(14

)

Beta Plus Technologies, Inc.

 

07/01/2029

 

Internet Software and Services

 

 

11.14

%

 

3M SOFR+575

 

 

 

4,950

 

 

 

4,862

 

 

 

4,604

 

BioDerm, Inc. (Revolver) (7)

 

01/31/2028

 

Healthcare Equipment and Supplies

 

 

11.81

%

 

1M SOFR+650

 

 

 

107

 

 

 

107

 

 

 

107

 

BioDerm, Inc. (Revolver) (9)

 

01/31/2028

 

Healthcare Equipment and Supplies

 

 

 

 

 

 

 

 

964

 

 

 

 

 

 

(5

)

Blackhawk Industrial Distribution, Inc.

 

09/17/2026

 

Distributors

 

 

11.79

%

 

3M SOFR+640

 

 

 

631

 

 

 

628

 

 

 

622

 

Blackhawk Industrial Distribution, Inc. - Unfunded Term Loan

 

09/17/2026

 

Distributors

 

 

 

 

 

 

 

 

2,624

 

 

 

 

 

 

(26

)

Blackhawk Industrial Distribution, Inc. (Revolver) (7)

 

09/17/2026

 

Distributors

 

 

13.75

%

 

3M SOFR+525

 

 

 

274

 

 

 

274

 

 

 

270

 

Blackhawk Industrial Distribution, Inc. (9)

 

09/17/2026

 

Distributors

 

 

 

 

 

 

 

 

2,469

 

 

 

 

 

 

(37

)

Broder Bros., Co.

 

12/04/2025

 

Textiles, Apparel and Luxury Goods

 

 

11.50

%

 

3M SOFR+626

 

 

 

3,324

 

 

 

3,324

 

 

 

3,324

 

By Light Professional IT Services, LLC

 

05/16/2025

 

High Tech Industries

 

 

12.43

%

 

3M SOFR+688

 

 

 

25,674

 

 

 

25,499

 

 

 

25,224

 

By Light Professional IT Services, LLC (Revolver) (7)(9)

 

05/16/2025

 

High Tech Industries

 

 

 

 

 

 

 

 

3,507

 

 

 

 

 

 

(61

)

Cadence Aerospace, LLC (7)

 

11/14/2023

 

Aerospace and Defense

 

 

12.07

%

 

3M SOFR+665

 

 

 

980

 

 

 

980

 

 

 

980

 

 

 

 

 

 

 

(PIK 9.50%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cartessa Aesthetics, LLC

 

06/14/2028

 

Distributors

 

 

11.39

%

 

3M SOFR+600

 

 

 

13,076

 

 

 

12,907

 

 

 

13,076

 

Cartessa Aesthetics, LLC (Revolver) (7)

 

06/14/2028

 

Distributors

 

 

11.39

%

 

3M SOFR+600

 

 

 

511

 

 

 

511

 

 

 

511

 

Cartessa Aesthetics, LLC (Revolver) (7)(9)

 

06/14/2028

 

Distributors

 

 

 

 

 

 

 

 

927

 

 

 

 

 

 

-

 

CF512, Inc.

 

08/20/2026

 

Media

 

 

11.59

%

 

3M SOFR+619

 

 

 

5,980

 

 

 

5,930

 

 

 

5,860

 

CF512, Inc. (Revolver) (7), (9)

 

08/20/2026

 

Media

 

 

 

 

 

 

 

 

955

 

 

 

 

 

 

(19

)

CHA Holdings, Inc.

 

04/10/2025

 

Environmental Industries

 

 

10.15

%

 

3M SOFR+476

 

 

 

1,564

 

 

 

1,562

 

 

 

1,564

 

Challenger Performance Optimization, Inc.

 

08/31/2024

 

Business Services

 

 

12.18

%

 

3M L+675

 

 

 

237

 

 

 

237

 

 

 

230

 

Compex Legal Services, Inc.

 

02/09/2026

 

Professional Services

 

 

10.99

%

 

3M SOFR+525

 

 

 

8,925

 

 

 

8,891

 

 

 

8,925

 

Compex Legal Services, Inc. (Revolver) (7)

 

02/07/2025

 

Professional Services

 

 

10.94

%

 

3M SOFR+555

 

 

 

141

 

 

 

141

 

 

 

141

 

Compex Legal Services, Inc. (Revolver) (7), (9)

 

02/07/2025

 

Professional Services

 

 

 

 

 

 

 

 

1,265

 

 

 

 

 

 

 

Connatix Buyer, Inc.

 

07/13/2027

 

Media

 

 

11.16

%

 

1M SOFR+576

 

 

 

3,814

 

 

 

3,761

 

 

 

3,681

 

Connatix Buyer, Inc. (7), (9)

 

07/13/2027

 

Media

 

 

 

 

 

 

 

 

1,234

 

 

 

 

 

 

(43

)

Crane 1 Services, Inc.

 

08/16/2027

 

Commercial Services & Supplies

 

 

10.90

%

 

3M SOFR+551

 

 

 

882

 

 

 

871

 

 

 

878

 

Crane 1 Services, Inc. (Revolver) (7)

 

08/16/2027

 

Commercial Services & Supplies

 

 

10.90

%

 

3M SOFR+551

 

 

 

135

 

 

 

135

 

 

 

134

 

Crane 1 Services, Inc. (Revolver) (7)

 

08/16/2027

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

202

 

 

 

 

 

 

(1

)

Dr. Squatch, LLC

 

08/31/2027

 

Personal Products

 

 

11.24

%

 

3M SOFR+585

 

 

 

4,383

 

 

 

4,328

 

 

 

4,383

 

Dr. Squatch, LLC (Revolver) (7), (9)

 

08/31/2027

 

Personal Products