PennantPark Floating Rate Capital Ltd (PFLT, Financial) released its 8-K filing on November 15, 2023, disclosing its financial results for the fourth quarter and fiscal year ended September 30, 2023. The company reported a solid performance with a notable increase in net investment income per share and a slight uptick in net asset value (NAV).
Financial Highlights and Portfolio Performance
PFLT's investment portfolio was valued at $1,067.2 million, with net assets totaling $653.6 million. The company's NAV per share rose to $11.13, marking a quarterly increase of 1.6%. The adjusted NAV per share, a non-GAAP measure, also saw a 1.2% increase. PFLT's debt portfolio was composed entirely of variable-rate investments, with a weighted average yield of 12.6% at quarter-end.
During the fiscal year, PFLT's operating results showcased a net investment income of $67.5 million, translating to $1.33 per share. Core net investment income per share, another non-GAAP measure, was reported at $1.27. Distributions declared per share amounted to $1.19 for the year.
The company's portfolio activity was robust, with $324.5 million in investment purchases and $399.1 million in sales and repayments. PFLT's joint venture, PennantPark Senior Secured Loan Fund I LLC (PSSL), also had a dynamic year with a portfolio totaling $785.9 million and investments in 105 companies.
Income Statement and Balance Sheet Overview
Investment income for the year reached $139.3 million, primarily driven by first lien secured debt. Expenses for the year totaled $71.8 million, with debt-related interest and expenses as well as incentive fees constituting the largest components. 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 stood at $18.5 million for the quarter and $67.5 million for the year. Net realized losses on investments and debt for the year were $16.2 million, while net change in unrealized appreciation on investments was a loss of $12.6 million, reflecting market conditions.
As for liquidity and capital resources, PFLT had cash equivalents of $100.0 million as of September 30, 2023, and believes its liquidity and capital resources are sufficient for efficient operation. The company's operating activities provided cash of $143.6 million for the year, while financing activities used cash of $91.5 million, primarily to fund repayments under the Credit Facility.
Outlook and Developments
Art Penn, Chairman and CEO, expressed satisfaction with the company's performance and the potential for increased income through PFLT and PSSL's growing balance sheets. The company's investment strategy remains focused on floating rate senior secured loans in the U.S. middle-market sector.
Subsequent to the fiscal year-end, PFLT continued its investment activities, deploying $76.2 million in new and existing portfolio companies. The company also expects to report certain material weaknesses in internal control over financial reporting in its upcoming 10-K filing, which are not anticipated to affect the accuracy of its financial statements.
For more detailed information on PennantPark Floating Rate Capital Ltd's financial results, readers are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from PennantPark Floating Rate Capital Ltd for further details.
