Portman Ridge Finance : Announces Fourth Quarter and Full Year 2024 Financial Results

Published: 2025-03-13 16:28:15 ET PTMN

Reports Net Investment Income of $2.59 Per Share for Full Year 2024 and Net Asset Value of $19.41 Per Share

Continued Share Repurchase Program: Total of 202,357 Shares for an Aggregate Cost of Approximately $3.8 Million Repurchased During Full Year 2024; Accretive to NAV by $0.07 Per Share

Announces First Quarter 2025 Regular Quarterly Base Distribution of $0.47 Per Share and Introduces a Quarterly Supplemental Distribution of $0.07 Per Share

Merger Agreement with Logan Ridge Aims to Create Meaningful Shareholder Value Via Greater Scale, Enhanced Liquidity, and Improved Operational Efficiencies

NEW YORK, March 13, 2025 (GLOBE NEWSWIRE) -- Portman Ridge Finance Corporation (Nasdaq: PTMN) (the "Company" or "Portman Ridge") announced today its financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Highlights

Full Year 2024 Milestones

Subsequent Events

Management Commentary

Ted Goldthorpe, Chief Executive Officer of Portman Ridge, stated, "While 2024 had several positive developments for Portman, including the potential for an accretive combination with Logan Ridge announced just after year end, the Company's financial results were impacted by certain idiosyncratic challenges within our investment portfolio. We will continue to focus on our underperforming credits and I remain confident in our ability to drive the best outcome for shareholders and, most importantly, in the credit quality of the portfolio overall. On that note, I am pleased to share that we were able to reduce the number non-accrual investments from nine investments as of September 30, 2024 to six investments as of December 31, 2024. As we enter the new year, we continue to believe we are well positioned for what we expect will be an active year for M&A and deployment. As always, we remain committed to our shareholders and continuing to grow our business.

Further, the Board of Directors approved a regular quarterly base distribution of $0.47 per share and a supplemental cash distribution of $0.07 per share. The modification to the dividend policy introduces a stable base distribution, which is anticipated to be sustainable across market cycles, and a quarterly supplemental distribution, which will approximate 50% of net investment income in excess of the quarterly base distribution to account for fluctuations in rates and spreads.

Looking ahead, we are excited about the opportunities that the proposed merger with LRFC will create. Most importantly, with our prudent investment strategy and experienced management team, we remain confident in our ability to generate strong, risk-adjusted returns and drive long-term value for our shareholders."

Selected Financial Highlights for Full Year 2024

Results of Operations

Operating results for the years ended December 31, 2024, and December 31, 2023, were as follows:

Investment Income

The composition of our investment income for the years ended December 31, 2024, and December 31, 2023, was as follows:

Fair Value of Investments

The composition of our investment portfolio as of December 31, 2024, and December 31, 2023, at cost and fair value was as follows:

(1) Represents the equity investment in the Asset Manager Affiliates.

Liquidity and Capital Resources

As of December 31, 2024, the Company had $267.5 million (par value) of borrowings outstanding at a current weighted average interest rate of 6.2%, of which $108.0 million par value had a fixed rate and $159.5 million par value had a floating rate. This balance was comprised of $159.5 million of outstanding borrowings under the JPM Credit Facility, and $108.0 million of 4.875% Notes due 2026. On August 20, 2024, an optional redemption of the CLO occurred, and all rated notes were repaid in full. As of December 31, 2024, no 2018-2 Secured Notes were outstanding.

As of December 31, 2024, and December 31, 2023, the fair value of investments and cash were as follows:

As of December 31, 2024, the Company had unrestricted cash of $17.5 million and restricted cash of $22.4 million. This compares to unrestricted cash of $13.7 million and restricted cash of $13.0 million as of September 30, 2024. As of December 31, 2024, the Company had $40.5 million of available borrowing capacity under the JPM Credit Facility.

Interest Rate Risk

The Company's investment income is affected by fluctuations in various interest rates, including SOFR and prime rates.

As of December 31, 2024, approximately 90.1% of our Debt Securities Portfolio at par value were either floating rate with a spread to an interest rate index such as SOFR or the PRIME rate. 89.8% of these floating rate loans contain floors ranging between 0.50% and 5.25%. We generally expect that future portfolio investments will predominately be floating rate investments.

In periods of rising or lowering interest rates, the cost of the portion of debt associated with the 4.875% Notes Due 2026 would remain the same, given that this debt is at a fixed rate, while the interest rate on borrowings under the JPM Credit Facility would fluctuate with changes in interest rates.

Generally, the Company would expect that an increase in the base rate index for floating rate investment assets would increase gross investment income and a decrease in the base rate index for such assets would decrease gross investment income (in either case, such increase/decrease may be limited by interest rate floors/minimums for certain investment assets).

Conference Call and Webcast

We will hold a conference call on Friday, March 14, 2024, at 10:30 am Eastern Time to discuss our fourth quarter and full year 2024 financial results. To access the call, stockholders, prospective stockholders and analysts should dial (646) 968-2525 approximately 10 minutes prior to the start of the conference call and use the conference ID 4473265.

A replay of this conference call will be available shortly after the live call through March 21, 2025.

A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company's website www.portmanridge.com in the Investor Relations section under Events and Presentations. The webcast can also be accessed by clicking the following link: https://edge.media-server.com/mmc/p/4vkehc2n. The online archive of the webcast will be available on the Company's website shortly after the call.

About Portman Ridge Finance Corporation

Portman Ridge Finance Corporation (Nasdaq: PTMN) is a publicly traded, externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Portman Ridge's middle market investment business originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. Portman Ridge's investment activities are managed by its investment adviser, Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors L.P.

Portman Ridge's filings with the Securities and Exchange Commission (the "SEC"), earnings releases, press releases and other financial, operational and governance information are available on the Company's website at www.portmanridge.com.

About BC Partners Advisors L.P. and BC Partners Credit

BC Partners is a leading international investment firm in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades.

Today, BC Partners executives operate across markets as an integrated team through the firm's offices in North America and Europe. For more information, please visit https://www.bcpartners.com/.

BC Partners Credit was launched in February 2017 and has pursued a strategy focused on identifying attractive credit opportunities in any market environment and across sectors, leveraging the deal sourcing and infrastructure made available from BC Partners.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements. The matters discussed in this press release, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.

Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments and the future liquidity of the Company. We generally identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "outlook", "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar words. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.

Important assumptions include our ability to originate new investments, and achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation that such plans, estimates, expectations or objectives will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) uncertainty of the expected financial performance of the Company; (2) expected synergies and savings associated with merger transactions effectuated by the Company; (3) the ability of the Company and/or its adviser to implement its business strategy; (4) evolving legal, regulatory and tax regimes; (5) changes in general economic and/or industry specific conditions, including but not limited to the impact of inflation; (6) the impact of increased competition; (7) business prospects and the prospects of the Company's portfolio companies; (8) contractual arrangements with third parties; (9) any future financings by the Company; (10) the ability of Sierra Crest Investment Management LLC to attract and retain highly talented professionals; (11) the Company's ability to fund any unfunded commitments; (12) any future distributions by the Company; (13) changes in regional or national economic conditions and their impact on the industries in which we invest; (14) other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the SEC; (15) the successful completion of the Mergers and receipt of stockholder approval from the Company's and LRFC's stockholders; and (16) expectations concerning the proposed Merger with LRFC, including the financial results of the combined company. The forward-looking statements should be read in conjunction with the risks and uncertainties discussed in the Company's filings with the SEC, including the Company's most recent Form 10-K and other SEC filings. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the SEC.

Contacts:Portman Ridge Finance Corporation 650 Madison Avenue, 3rd floor New York, NY 10022 info@portmanridge.com

Brandon Satoren Chief Financial Officer Brandon.Satoren@bcpartners.com (212) 891-2880

The Equity Group Inc. Lena Cati lcati@equityny.com (212) 836-9611

Val Ferraro vferraro@equityny.com (212) 836-9633

__________________________________ ¹ Core investment income represents reported total investment income as determined in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, less the impact of purchase discount accretion in connection with the Garrison Capital Inc. ("GARS") and Harvest Capital Credit Corporation ("HCAP") mergers. Portman Ridge believes presenting core investment income and the related per share amount is useful and appropriate supplemental disclosure for analyzing its financial performance due to the unique circumstance giving rise to the purchase accounting adjustment. However, core investment income is a non-U.S. GAAP measure and should not be considered as a replacement for total investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, core investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge's financial performance. ² Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and cash equivalents, and restricted cash and (B) NAV. Portman Ridge believes presenting a net leverage ratio is useful and appropriate supplemental disclosure because it reflects the Company's financial condition net of $40.0 million and $26.8 million of cash and cash equivalents and restricted cash as of December 31, 2024 and September 30, 2024, respectively. However, the net leverage ratio is a non-U.S. GAAP measure and should not be considered as a replacement for the regulatory asset coverage ratio and other similar information presented in accordance with U.S. GAAP. Instead, the net leverage ratio should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge's financial condition.

Source: Portman Ridge Finance Corporation

Disclaimer

Portman Ridge Finance Corporation published this content on March 13, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 13, 2025 at 20:27:03.606.