Apollo Investment Corporation (NASDAQ: AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its second fiscal quarter ended September 30, 2015. The Company’s net investment income was $0.21 per share for the quarter ended September 30, 2015, compared to $0.22 for the quarter ended June 30, 2015. The Company’s net asset value (“NAV”) was $7.83 per share as of September 30, 2015, compared to $8.01 as of June 30, 2015.
Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the second fiscal quarter of 2016, payable on January 5, 2016 to stockholders of record as of December 21, 2015. The specific tax characteristics of this dividend will be reported to stockholders on Form 1099 after the end of the calendar year.
Mr. James Zelter, Apollo Investment’s Chief Executive Officer, commented, “During the quarter we focused on investing in existing portfolio companies and redeploying a portion of capital from sales and repayments into our stock repurchase plan. We repurchased over $21 million of common stock during the quarter.” Mr. Zelter continued, “Given where our stock is currently trading, we intend to continue repurchasing shares.”
FINANCIAL HIGHLIGHTS
| ($ in billions, except per share) | 9/30/15 | 6/30/15 | 3/31/15 | 12/31/14 | 9/30/14 | |||||
| Total assets | $ 3.30 | $ 3.45 | $ 3.56 | $ 3.70 | $ 3.83 | |||||
| Investment portfolio (fair value) | $ 3.19 | $ 3.31 | $ 3.35 | $ 3.51 | $ 3.67 | |||||
| Debt outstanding | $ 1.37 | $ 1.39 | $ 1.50 | $ 1.59 | $ 1.58 | |||||
| Total net assets | $ 1.83 | $ 1.90 | $ 1.94 | $ 2.00 | $ 2.06 | |||||
| Net asset value per share | $ 7.83 | $ 8.01 | $ 8.18 | $ 8.43 | $ 8.72 | |||||
| Debt-to-equity ratio | 0.75 x | 0.73 x | 0.77 x | 0.80 x | 0.76 x | |||||
| Net leverage ratio (1) | 0.73 x | 0.72 x | 0.72 x | 0.74 x | 0.76 x |
______________ | ||
| (1) | The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash, less foreign currency, divided by total net assets. | |
INVESTMENT ACTIVITY AND PORTFOLIO COMPANIES
| ($ in millions) | Three months ended September 30, 2015 | Six months ended September 30, 2015 | ||||||
| Investments made (2) | $ | 204 | $ | 714 | ||||
| Investments sold | (80 | ) | (415 | ) | ||||
| Net activity before repaid investments | $ | 124 | $ | 299 | ||||
| Investments repaid | (200 | ) | (398 | ) | ||||
| Net investment activity (3) | $ | (75 | ) | $ | (99 | ) | ||
| Portfolio companies, at beginning of period | 102 | 105 | ||||||
| New portfolio companies | 4 | 14 | ||||||
| Exited portfolio companies | (8 | ) | (21 | ) | ||||
| Portfolio companies, at end of period | 98 | 98 | ||||||
| Number of investments in existing companies | 9 | 29 | ||||||
_________________ | ||
| (2) | Investments were primarily made through a combination of primary and secondary debt investments. | |
| (3) | Numbers may not sum due to rounding. | |
OPERATING RESULTS
| ($ in thousands, except per share data) | Three months ended September 30, 2015 | Six months ended September 30, 2015 | ||||||
| Net investment income | $ | 49,561 | $ | 100,548 | ||||
| Net realized and unrealized loss | (51,308 | ) | (95,904 | ) | ||||
| Net increase (decrease) in net assets from operations | $ | (1,747 | ) | $ | 4,644 | |||
| (per share) | ||||||||
| Net investment income per share | $ | 0.21 | $ | 0.43 | ||||
| Net realized and unrealized loss per share | (0.22 | ) | (0.41 | ) | ||||
| Earnings (Loss) per share – basic | $ | (0.01 | ) | $ | 0.02 | |||
| Earnings (Loss) per share – diluted (4) | $ | (0.01 | ) | $ | 0.02 | |||
| (4) | In applying the if-converted method, conversion shall not be assumed for purposes of computing diluted earnings per share if the effect would be anti-dilutive. For the three and six months ended September 30, 2015, anti-dilution would total $0.01 and $0.02, respectively. | |
CONFERENCE CALL / WEBCAST AT 10:00 AM EST ON NOVEMBER 5, 2015
The Company will host a conference call on Thursday, November 5, 2015 at 10:00 a.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 # 53609056 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 Event Calendar in the Investor Relations 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, 2015 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 53609056. A replay of the audio webcast will also be available later that same day. To access the audio webcast please visit the Event Calendar in the Investor Relations 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 Investor Relations section of the Company’s website at www.apolloic.com.
Our portfolio composition and weighted average yields at September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, and September 30, 2014, were as follows:
| September 30, 2015 | June 30, 2015 | March 31, 2015 | December | September | |||||||
| Portfolio composition, measured at fair value: | |||||||||||
| Secured debt | 63% | 64% | 60% | 61% | 63% | ||||||
| Unsecured debt | 9% | 10% | 14% | 15% | 17% | ||||||
| Structured products and other | 13% | 12% | 11% | 10% | 9% | ||||||
| Preferred equity | 5% | 4% | 5% | 4% | 3% | ||||||
| Common equity and warrants | 10% | 10% | 10% | 10% | 8% | ||||||
| Weighted average yields, at current cost basis, exclusive of securities on non-accrual status: | |||||||||||
| Secured debt portfolio | 11.3% | 11.5% | 11.2% | 11.0% | 10.9% | ||||||
| Unsecured debt portfolio | 11.3% | 11.3% | 10.9% | 11.1% | 11.1% | ||||||
| Total debt portfolio | 11.6% | 11.5% | 11.2% | 11.1% | 11.0% | ||||||
| Income-bearing investment portfolio composition, measured at fair value: | |||||||||||
| Fixed rate amount | $1.0 billion | $1.1 billion | $1.3 billion | $1.4 billion | $1.6 billion | ||||||
| Floating rate amount | $1.5 billion | $1.5 billion | $1.4 billion | $1.5 billion | $1.5 billion | ||||||
| Fixed rate % | 42% | 41% | 48% | 48% | 51% | ||||||
| Floating rate % | 58% | 59% | 52% | 52% | 49% | ||||||
| Income-bearing investment portfolio composition, measured at cost: | |||||||||||
| Fixed rate amount | $1.1 billion | $1.1 billion | $1.4 billion | $1.5 billion | $1.7 billion | ||||||
| Floating rate amount | $1.5 billion | $1.6 billion | $1.4 billion | $1.5 billion | $1.5 billion | ||||||
| Fixed rate % | 42% | 42% | 50% | 50% | 52% | ||||||
| Floating rate % | 58% | 58% | 50% | 50% | 48% | ||||||
APOLLO INVESTMENT CORPORATION STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except share and per share amounts) | |||||||||
| September 30, 2015 (unaudited) | March 31, 2015 | ||||||||
| Assets | |||||||||
| Non-controlled/non-affiliated investments, at fair value (cost — $2,399,503 and $2,514,328, respectively) | $ | 2,198,354 | $ | 2,357,042 | |||||
| Non-controlled/affiliated investments, at fair value (cost — $372,477 and $297,948, respectively) | 430,080 | 327,218 | |||||||
| Controlled investments, at fair value (cost — $539,194 and $674,299, respectively) | 565,215 | 665,567 | |||||||
| Total investments, at fair value (cost — $3,311,174 and $3,486,575, respectively) | 3,194,049 | 3,349,827 | |||||||
| Cash | 11,418 | 3,766 | |||||||
| Foreign currency (cost — $1,099 and $4,856, respectively) | 1,098 | 4,651 | |||||||
| Receivable for investments sold | 19,045 | 114,884 | |||||||
| Interest receivable | 29,131 | 43,312 | |||||||
| Dividends receivable | 12,640 | 5,425 | |||||||
| Deferred financing costs | 31,531 | 29,743 | |||||||
| Prepaid expenses and other assets | 3,943 | 9,283 | |||||||
| Total assets | $ | 3,302,855 | $ | 3,560,891 | |||||
| Liabilities | |||||||||
| Debt | $ | 1,370,163 | $ | 1,498,759 | |||||
| Payable for investments purchased | 396 | 10,736 | |||||||
| Dividends payable | 46,851 | 47,348 | |||||||
| Management and performance-based incentive fees payable | 29,557 | 37,361 | |||||||
| Interest payable | 15,745 | 15,851 | |||||||
| Accrued administrative expenses | 1,631 | 2,000 | |||||||
| Other liabilities and accrued expenses | 11,652 | 11,228 | |||||||
| Total liabilities | $ | 1,475,995 | $ | 1,623,283 | |||||
| Net Assets | |||||||||
| Common stock, par value $.001 per share, 400,000,000 and 400,000,000 common shares authorized, respectively, 233,400,951 and 236,741,351 issued and outstanding, respectively | $ | 233 | $ | 237 | |||||
| Paid-in capital in excess of par | 3,176,526 | 3,197,715 | |||||||
| Over-distributed net investment income | (29,240 | ) | (35,589 | ) | |||||
| Accumulated net realized loss | (1,213,600 | ) | (1,102,517 | ) | |||||
| Net unrealized loss | (107,059 | ) | (122,238 | ) | |||||
| Total net assets | $ | 1,826,860 | $ | 1,937,608 | |||||
| Total liabilities and net assets | $ | 3,302,855 | $ | 3,560,891 | |||||
| Net asset value per share | $ | 7.83 | $ | 8.18 | |||||
| APOLLO INVESTMENT CORPORATION STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||||
| Investment Income: | |||||||||||||||||
| From non-controlled/non-affiliated investments: | |||||||||||||||||
| Interest | $ | 70,255 | $ | 96,146 | $ | 143,829 | $ | 178,693 | |||||||||
| Dividends | 911 | 1,275 | 1,787 | 2,116 | |||||||||||||
| Other income | 2,828 | 4,038 | 6,145 | 6,294 | |||||||||||||
| From non-controlled/affiliated investments: | |||||||||||||||||
| Interest | 224 | 971 | 451 | 3,196 | |||||||||||||
| Dividends | 9,503 | 4,128 | 18,670 | 8,074 | |||||||||||||
| Other income | 70 | 44 | 227 | 87 | |||||||||||||
| From controlled investments: | |||||||||||||||||
| Interest | 10,629 | 10,104 | 21,183 | 18,955 | |||||||||||||
| Dividends | 4,000 | 1,891 | 7,731 | 3,699 | |||||||||||||
| Other income | — | 313 | 63 | 376 | |||||||||||||
| Total investment income | $ | 98,420 | $ | 118,910 | $ | 200,086 | $ | 221,490 | |||||||||
| Expenses: | |||||||||||||||||
| Management fees | $ | 16,727 | $ | 18,878 | $ | 34,079 | $ | 36,989 | |||||||||
| Performance-based incentive fees | 10,774 | 15,393 | 22,641 | 27,860 | |||||||||||||
| Interest and other debt expenses | 21,764 | 18,946 | 44,200 | 37,848 | |||||||||||||
| Administrative services expense | 1,650 | 1,525 | 3,083 | 2,958 | |||||||||||||
| Other general and administrative expenses | 2,725 | 2,617 | 4,889 | 4,904 | |||||||||||||
| Total expenses | $ | 53,640 | $ | 57,359 | $ | 108,892 | $ | 110,559 | |||||||||
| Management and performance-based incentive fees waived | $ | (4,722 | ) | $ | (4,041 | ) | $ | (9,237 | ) | $ | (8,193 | ) | |||||
| Expense reimbursements | (59 | ) | (96 | ) | (117 | ) | (116 | ) | |||||||||
| Net expenses | $ | 48,859 | $ | 53,222 | $ | 99,538 | $ | 102,250 | |||||||||
| Net investment income | $ | 49,561 | $ | 65,688 | $ | 100,548 | $ | 119,240 | |||||||||
| Realized and Unrealized Gain (Loss) on Investments and Foreign Currencies: | |||||||||||||||||
| Net realized gain (loss): | |||||||||||||||||
| Investments and cash equivalents | |||||||||||||||||
| Non-controlled/non-affiliated investments | $ | (34,124 | ) | $ | (173 | ) | $ | (76,785 | ) | $ | (11,889 | ) | |||||
| Non-controlled/affiliated investments | — | 11,633 | (67 | ) | 11,526 | ||||||||||||
| Controlled investments | 3,148 | — | (39,714 | ) | — | ||||||||||||
| Foreign currency transactions | 819 | 134 | 5,483 | (1,376 | ) | ||||||||||||
| Net realized gain (loss) | $ | (30,157 | ) | $ | 11,594 | $ | (111,083 | ) | $ | (1,739 | ) | ||||||
| Net change in unrealized gain (loss): | |||||||||||||||||
| Investments and cash equivalents | |||||||||||||||||
| Non-controlled/non-affiliated investments | $ | (48,094 | ) | $ | (51,169 | ) | $ | (43,863 | ) | $ | (48,574 | ) | |||||
| Non-controlled/affiliated investments | 12,916 | (1,961 | ) | 28,733 | 8,869 | ||||||||||||
| Controlled investments | 7,980 | 10,700 | 34,753 | 22,080 | |||||||||||||
| Foreign currency translations | 6,047 | 7,115 | (4,444 | ) | 6,727 | ||||||||||||
| Net change in unrealized gain (loss) | $ | (21,151 | ) | $ | (35,315 | ) | $ | 15,179 | $ | (10,898 | ) | ||||||
| Net realized and unrealized gain (loss) from investments, cash equivalents, foreign currencies and derivatives | (51,308 | ) | (23,721 | ) | (95,904 | ) | (12,637 | ) | |||||||||
| Net Increase (Decrease) In Net Assets Resulting From Operations | $ | (1,747 | ) | $ | 41,967 | $ | 4,644 | $ | 106,603 | ||||||||
| Earnings (Loss) Per Share — Basic | $ | (0.01 | ) | $ | 0.18 | $ | 0.02 | $ | 0.45 | ||||||||
| Earnings (Loss)Per Share — Diluted | $ | (0.01 | ) | $ | 0.18 | $ | 0.02 | $ | 0.44 | ||||||||
About Apollo Investment Corporation
Apollo Investment Corporation (NASDAQ: AINV) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. The Company invests primarily in various forms of debt investments, including secured and unsecured debt, loan investments, and/or equity in private middle-market companies. The Company may also invest in the securities of public companies and structured products and other investments such as collateralized loan obligations and credit-linked notes. The Company seeks to provide private financing solutions for private companies that do not have access to the more traditional providers of credit. Apollo Investment Corporation is managed by Apollo Investment Management, L.P., an affiliate of Apollo Global Management, LLC, a leading global alternative investment manager. For more information, please visit www.apolloic.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, including, but not limited to, statements as to our future operating results; our business prospects and the prospects of our portfolio companies; the impact of investments that we expect to make; our contractual arrangements and relationships with third parties; the dependence of our future success on the general economy and its impact on the industries in which we invest; the ability of our portfolio companies to achieve their objectives; our expected financings and investments; the adequacy of our cash resources and working capital; and the timing of cash flows, if any, from the operations of our portfolio companies.
We may use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may” 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. Statements regarding the following subjects, among others, may be forward-looking: the return on equity; the yield on investments; the ability to borrow to finance assets; new strategic initiatives; the ability to reposition the investment portfolio; the market outlook; future investment activity; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. We do not undertake to update our forward-looking statements unless required by law.
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Contacts:
Elizabeth Besen, 212-822-0625
Investor
Relations Manager
ebesen@apollolp.com
