NEW YORK--(BUSINESS WIRE)--Apollo Investment Corporation (NASDAQ:AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its third fiscal quarter ended December 31, 2015. The Company’s net investment income was $0.21 per share for the quarter ended December 31, 2015, compared to $0.21 per share for the quarter ended September 30, 2015. The Company’s net asset value (“NAV”) was $7.56 per share as of December 31, 2015, compared to $7.83 as of September 30, 2015.
Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the third fiscal quarter of 2016, payable on April 6, 2016 to stockholders of record as of March 21, 2016. 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, “NAV per share declined during the quarter due to the dislocation in the credit markets which resulted in spread widening, as well as from low and falling oil prices.” Mr. Zelter continued, “During the quarter we continued to repurchase stock. Since commencing our repurchase program in August, we have repurchased 10.6 million shares or 4.5% of initial shares outstanding for a total cost of $62 million. As a result, there has been a 7 cent per share accretive impact to NAV from stock buybacks through December.”
FINANCIAL HIGHLIGHTS
| ($ in billions, except per share) | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | |||||||||||||||
| Total assets | $ | 3.22 | $ | 3.30 | $ | 3.45 | $ | 3.56 | $ | 3.70 | ||||||||||
| Investment portfolio (fair value) | $ | 3.07 | $ | 3.19 | $ | 3.31 | $ | 3.35 | $ | 3.51 | ||||||||||
| Debt outstanding | $ | 1.38 | $ | 1.37 | $ | 1.39 | $ | 1.50 | $ | 1.59 | ||||||||||
| Total net assets | $ | 1.72 | $ | 1.83 | $ | 1.90 | $ | 1.94 | $ | 2.00 | ||||||||||
| Net asset value per share | $ | 7.56 | $ | 7.83 | $ | 8.01 | $ | 8.18 | $ | 8.43 | ||||||||||
| Debt-to-equity ratio | 0.80 | x | 0.75 x | 0.73 x | 0.77 x | 0.80 x | ||||||||||||||
| Net leverage ratio (1) | 0.76 | x | 0.73 x | 0.72 x | 0.72 x | 0.74 x | ||||||||||||||
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(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.
PORTFOLIO AND INVESTMENT ACTIVITY
| Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
| (in millions)* | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Investments made in portfolio companies (1) | $ | 204.6 | $ | 608.8 | $ | 918.2 | $ | 1,839.4 | ||||||||
| Investments sold | (139.7 | ) | (444.3 | ) | (554.5 | ) | (1,070.6 | ) | ||||||||
| Net activity before repaid investments | 64.9 | 164.4 | 363.6 | 768.8 | ||||||||||||
| Investments repaid | (121.9 | ) | (254.9 | ) | (519.5 | ) | (704.5 | ) | ||||||||
| Net investment activity | $ | (57.0 | ) | $ | (90.4 | ) | $ | (155.9 | ) | $ | 64.2 | |||||
| Portfolio companies at beginning of period | 98 | 113 | 105 | 111 | ||||||||||||
| Number of new portfolio companies | 4 | 13 | 18 | 53 | ||||||||||||
| Number of exited portfolio companies | (7 | ) | (17 | ) | (28 | ) | (55 | ) | ||||||||
| Portfolio companies at end of period | 95 | 109 | 95 | 109 | ||||||||||||
| Number of investments in existing portfolio companies | 19 | 13 | 48 | 55 | ||||||||||||
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* Totals may not foot due to rounding.
(1) Investments were primarily made through a combination of primary and secondary debt investments.
OPERATING RESULTS
| Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
| (in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Net investment income | $ | 48.1 | $ | 56.7 | $ | 148.6 | $ | 175.9 | ||||||||
| Net realized and change in unrealized gains (losses) | (73.9 | ) | (76.1 | ) | (169.8 | ) | (88.8 | ) | ||||||||
| Net increase (decrease) in net assets resulting from operations | $ | (25.8 | ) | $ | (19.5 | ) | $ | (21.1 | ) | $ | 87.2 | |||||
| (per share) | ||||||||||||||||
| Net investment income on per average share basis | $ | 0.21 | $ | 0.24 | $ | 0.63 | $ | 0.75 | ||||||||
| Net realized and change in unrealized loss per share | $ | (0.32 | ) | $ | (0.33 | ) | $ | (0.72 | ) | $ | (0.39 | ) | ||||
| Earnings (Loss) per share — basic | $ | (0.11 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | 0.36 | |||||
| Earnings (Loss) per share — diluted (1) | $ | (0.11 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | 0.36 | |||||
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(1) In applying the if-converted method, conversion is not assumed for purposes of computing diluted EPS if the effect would be anti-dilutive. For the three and nine months ended December 31, 2015, anti-dilution would total $0.02 and $0.04, respectively. For the three and nine months ended December 31, 2014, anti-dilution would total $0.01 and $0.01, respectively.
CONFERENCE CALL / WEBCAST AT 8:30 AM EST ON FEBRUARY 9, 2016
The Company will host a conference call on Tuesday, February 9, 2016 at 8:30 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 # 19531073 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 February 26, 2016 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 19531073. 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.
The portfolio composition and weighted average yields at December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, and December 31, 2014 were as follows:
| December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | ||||||||||||||||
| Portfolio composition, at fair value: | ||||||||||||||||||||
| Secured debt | 67 | % | 63 | % | 64 | % | 60 | % | 61 | % | ||||||||||
| Unsecured debt | 9 | % | 9 | % | 10 | % | 14 | % | 15 | % | ||||||||||
| Structured products and other (1) | 11 | % | 13 | % | 12 | % | 11 | % | 10 | % | ||||||||||
| Preferred equity | 3 | % | 5 | % | 4 | % | 5 | % | 4 | % | ||||||||||
| Common equity/interests and warrants | 10 | % | 10 | % | 10 | % | 10 | % | 10 | % | ||||||||||
| Weighted average yields, at amortized cost basis, exclusive of securities on non-accrual status (2): | ||||||||||||||||||||
| Secured debt portfolio | 11.4 | % | 11.3 | % | 11.5 | % | 11.2 | % | 11.0 | % | ||||||||||
| Unsecured debt portfolio | 11.2 | % | 11.3 | % | 11.3 | % | 10.9 | % | 11.1 | % | ||||||||||
| Total debt portfolio | 11.4 | % | 11.6 | % | 11.5 | % | 11.2 | % | 11.1 | % | ||||||||||
| Income-bearing investment portfolio composition, at fair value: | ||||||||||||||||||||
| Fixed rate amount | $ | 1.2 | billion | $ | 1.0 | billion | $ | 1.1 | billion | $ | 1.3 | billion | $ | 1.4 | billion | |||||
| Floating rate amount | $ | 1.3 | billion | $ | 1.5 | billion | $ | 1.5 | billion | $ | 1.4 | billion | $ | 1.5 | billion | |||||
| Fixed rate, as percentage of total | 48 | % | 42 | % | 41 | % | 48 | % | 48 | % | ||||||||||
| Floating rate, as percentage of total | 52 | % | 58 | % | 59 | % | 52 | % | 52 | % | ||||||||||
| Income-bearing investment portfolio composition, at amortized cost: | ||||||||||||||||||||
| Fixed rate amount | $ | 1.3 | billion | $ | 1.1 | billion | $ | 1.1 | billion | $ | 1.4 | billion | $ | 1.5 | billion | |||||
| Floating rate amount | $ | 1.3 | billion | $ | 1.5 | billion | $ | 1.6 | billion | $ | 1.4 | billion | $ | 1.5 | billion | |||||
| Fixed rate, as percentage of total | 49 | % | 42 | % | 42 | % | 50 | % | 50 | % | ||||||||||
| Floating rate, as percentage of total | 51 | % | 58 | % | 58 | % | 50 | % | 50 | % | ||||||||||
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(1) Structured products and other such as collateralized loan obligations and credit-linked notes are typically a form of securitization in which the cash flows of a portfolio of loans are pooled and passed on to different classes of debt and residual interest in order of seniority.
(2) An investor’s yield may be lower than the portfolio yield due to sales loads and other expenses.
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APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES (In thousands, except share and per share data) |
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| December 31, 2015 | March 31, 2015 | ||||||||
| (Unaudited) | |||||||||
| Assets | |||||||||
| Investments at fair value: | |||||||||
| Non-controlled/non-affiliated investments (cost — $2,353,855 and $2,514,328, respectively) | $ | 2,079,618 | $ | 2,357,042 | |||||
| Non-controlled/affiliated investments (cost — $188,725 and $297,948, respectively) | 249,607 | 327,218 | |||||||
| Controlled investments (cost — $715,920 and $674,299, respectively) | 739,768 | 665,567 | |||||||
| Total investments at fair value (cost — $3,258,500 and $3,486,575, respectively) | 3,068,993 | 3,349,827 | |||||||
| Cash | 10,414 | 3,766 | |||||||
| Foreign currencies (cost — $2,125 and $4,856, respectively) | 2,113 | 4,651 | |||||||
| Receivable for investments sold | 63,024 | 114,884 | |||||||
| Interest receivable | 32,603 | 43,312 | |||||||
| Dividends receivable | 8,874 | 5,425 | |||||||
| Deferred financing costs | 30,111 | 29,743 | |||||||
| Prepaid expenses and other assets | 3,162 | 9,283 | |||||||
| Total Assets | $ | 3,219,294 | $ | 3,560,891 | |||||
| Liabilities | |||||||||
| Debt | $ | 1,384,719 | $ | 1,498,759 | |||||
| Payable for investments purchased | 5,282 | 10,736 | |||||||
| Dividends payable | 45,634 | 47,348 | |||||||
| Management and performance-based incentive fees payable | 30,086 | 37,361 | |||||||
| Interest payable | 17,292 | 15,851 | |||||||
| Accrued administrative services expense | 1,808 | 2,000 | |||||||
| Other liabilities and accrued expenses | 10,264 | 11,228 | |||||||
| Total Liabilities | $ | 1,495,085 | $ | 1,623,283 | |||||
| Net Assets | $ | 1,724,209 | $ | 1,937,608 | |||||
| Net Assets | |||||||||
| Common stock, $0.001 par value (400,000,000 shares authorized; 228,168,622 and 236,741,351 shares issued and outstanding, respectively) | $ | 228 | $ | 237 | |||||
| Paid-in capital in excess of par | 3,145,287 | 3,197,715 | |||||||
| Over-distributed net investment income | (26,783 | ) | (35,589 | ) | |||||
| Accumulated net realized loss | (1,222,886 | ) | (1,102,517 | ) | |||||
| Net unrealized loss | (171,637 | ) | (122,238 | ) | |||||
| Net Assets | $ | 1,724,209 | $ | 1,937,608 | |||||
| Net Asset Value Per Share | $ | 7.56 | $ | 8.18 | |||||
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APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) |
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|
Three Months Ended December 31, |
Nine Months Ended December 31, |
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| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Investment Income | |||||||||||||||||
| Non-controlled/non-affiliated investments: | |||||||||||||||||
| Interest income | $ | 61,756 | $ | 87,606 | $ | 205,585 | $ | 266,300 | |||||||||
| Dividend income | 1,037 | 991 | 2,824 | 3,106 | |||||||||||||
| Other income | 677 | 4,533 | 6,822 | 10,827 | |||||||||||||
| Non-controlled/affiliated investments: | |||||||||||||||||
| Interest income | 182 | 283 | 633 | 3,479 | |||||||||||||
| Dividend income | 9,594 | 4,393 | 28,263 | 12,467 | |||||||||||||
| Other income | 70 | — | 297 | 87 | |||||||||||||
| Controlled investments: | |||||||||||||||||
| Interest income | 13,388 | 10,199 | 34,571 | 29,154 | |||||||||||||
| Dividend income | 7,621 | 1,958 | 15,352 | 5,658 | |||||||||||||
| Other income | — | 63 | 63 | 438 | |||||||||||||
| Total Investment Income | $ | 94,325 | $ | 110,026 | $ | 294,410 | $ | 331,516 | |||||||||
| Expenses | |||||||||||||||||
| Management fees | $ | 16,478 | $ | 18,755 | $ | 50,557 | $ | 55,744 | |||||||||
| Performance-based incentive fees | 11,142 | 13,215 | 33,783 | 41,075 | |||||||||||||
| Interest and other debt expenses | 19,335 | 20,315 | 63,535 | 58,163 | |||||||||||||
| Administrative services expense | 1,531 | 1,863 | 4,614 | 4,821 | |||||||||||||
| Other general and administrative expenses | 2,806 | 3,014 | 7,695 | 7,919 | |||||||||||||
| Total expenses | 51,292 | 57,162 | 160,184 | 167,722 | |||||||||||||
| Management and performance-based incentive fees waived | (4,999 | ) | (3,740 | ) | (14,237 | ) | (11,934 | ) | |||||||||
| Expense reimbursements | (59 | ) | (58 | ) | (176 | ) | (174 | ) | |||||||||
| Net Expenses | $ | 46,234 | $ | 53,364 | $ | 145,771 | $ | 155,614 | |||||||||
| Net Investment Income | $ | 48,091 | $ | 56,662 | $ | 148,639 | $ | 175,902 | |||||||||
| Net Realized and Change in Unrealized Gains (Losses) | |||||||||||||||||
| Net realized gains (losses): | |||||||||||||||||
| Non-controlled/non-affiliated investments | $ | (6,112 | ) | $ | (2,355 | ) | $ | (82,896 | ) | $ | (14,244 | ) | |||||
| Non-controlled/affiliated investments | (1,575 | ) | (169 | ) | (1,642 | ) | 11,357 | ||||||||||
| Controlled investments | — | (57 | ) | (39,714 | ) | (57 | ) | ||||||||||
| Foreign currency transactions | (1,599 | ) | 1,151 | 3,883 | (225 | ) | |||||||||||
| Net realized losses | (9,286 | ) | (1,430 | ) | (120,369 | ) | (3,169 | ) | |||||||||
| Net change in unrealized gains (losses): | |||||||||||||||||
| Non-controlled/non-affiliated investments | (73,088 | ) | (100,749 | ) | (116,950 | ) | (149,322 | ) | |||||||||
| Non-controlled/affiliated investments | 2,879 | 13,320 | 31,612 | 22,189 | |||||||||||||
| Controlled investments | (2,173 | ) | 9,687 | 32,579 | 31,767 | ||||||||||||
| Foreign currency translations | 7,805 | 3,058 | 3,360 | 9,785 | |||||||||||||
| Net change in unrealized losses | (64,577 | ) | (74,684 | ) | (49,399 | ) | (85,581 | ) | |||||||||
| Net Realized and Change in Unrealized Losses | $ | (73,863 | ) | $ | (76,114 | ) | $ | (169,768 | ) | $ | (88,750 | ) | |||||
| Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (25,772 | ) | $ | (19,452 | ) | $ | (21,129 | ) | $ | 87,152 | ||||||
| Earnings (Loss) Per Share — Basic | $ | (0.11 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | 0.36 | ||||||
| Earnings (Loss) Per Share — Diluted | $ | (0.11 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | 0.36 | ||||||
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.
