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Apollo Investment Corporation Reports Financial Results for the Quarter Ended June 30, 2015

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August 6, 2015 7:30 AM EDT

Fiscal First Quarter and other Recent Highlights:

  • Net investment income per share for the quarter was $0.22, compared to $0.22 for the quarter ended March 31, 2015
  • Net asset value per share at the end of the quarter was $8.01, compared to $8.18 at March 31, 2015, a decline of 2.1%
  • Declared a dividend of $0.20 per share for the quarter
  • Invested $509 million during the quarter
  • Net investment activity before repayment was positive $175 million, and net investment activity after repayments was negative $23 million for the quarter
  • Adopted a plan for the purpose of repurchasing up to $50 million of common stock

NEW YORK--(BUSINESS WIRE)-- Apollo Investment Corporation (NASDAQ: AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its first fiscal quarter ended June 30, 2015. The Company’s net investment income was $0.22 per share for the quarter ended June 30, 2015, compared to $0.22 for the quarter ended March 31, 2015. The Company’s net asset value (“NAV”) was $8.01 per share as of June 30, 2015, compared to $8.18, as of March 31, 2015.

Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the first fiscal quarter of 2016, payable on October 6, 2015 to stockholders of record as of September 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 Corporation’s Chief Executive Officer, commented, “During the quarter, we continued to successfully execute on our portfolio rotation strategy as secured debt increased to 64% of the total portfolio. We also executed against our goal of monetizing select equity positions as evidenced by the exit of our investment in PlayPower. We will continue to look to monetize non-yielding investments and redeploy the proceeds into income-producing assets.” Mr. Zelter continued, “Consistent with our objective of maximizing shareholder value, and given where our stock is currently trading, we intend to begin repurchasing shares.”

                   

FINANCIAL HIGHLIGHTS

 
($ in billions, except per share) 6/30/15 3/31/15 12/31/14 9/30/14 6/30/14
Total assets $ 3.45 $ 3.56 $ 3.70 $ 3.83 $ 3.81
Investment portfolio (fair value) $ 3.31 $ 3.35 $ 3.51 $ 3.67 $ 3.64
Debt outstanding $ 1.39 $ 1.50 $ 1.59 $ 1.58 $ 1.57
Total net assets $ 1.90 $ 1.94 $ 2.00 $ 2.06 $ 2.07
Net asset value per share $ 8.01 $ 8.18 $ 8.43 $ 8.72 $ 8.74
 
Debt-to-equity ratio 0.73 x 0.77 x 0.80 x 0.76 x 0.76 x
Net leverage ratio (1) 0.72 x 0.72 x 0.74 x 0.76 x 0.75 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 endedJune 30, 2015

 

Investments made (2) $ 509
Investments sold $ (334 )
Net activity before repaid investments $ 175
Investments repaid $ (198 )
Net investment activity $ (23 )
 
Portfolio companies, at beginning of period 105
New portfolio companies 10
Exited portfolio companies (13 )
Portfolio companies, at end of period 102
 
Number of investments in existing companies 20
 
(2) Investments were primarily made through a combination of primary and secondary debt investments.
 
   

OPERATING RESULTS

 
($ in thousands, except per share data)

Three months endedJune 30, 2015

 

Net investment income $ 50,986
Net realized and unrealized loss $ (44,596 )
Net increase in net assets from operations $ 6,390
 
(per share)
Net investment income per share $ 0.22
Net realized and unrealized loss per share $ (0.19 )
Earnings per share – basic $ 0.03
Earnings per share – diluted (3) $ 0.03
(3) In applying the if-converted method, conversion shall not be assumed for purposes of computing diluted EPS if the effect would be anti-dilutive. For the three months ended June 30, 2015, anti-dilution would total $0.01.
 

CONFERENCE CALL / WEBCAST AT 10:00 AM EDT ON AUGUST 6, 2015

The Company will host a conference call on Thursday, August 6, 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 # 76707398 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 August 20, 2015 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 76707398. 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 our 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 June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014 are as follows:

                   

June30, 2015

March31, 2015

December31, 2014

September30, 2014

June30, 2014

Portfolio composition, measured at fairvalue:

Secured debt 64 % 60 % 61 % 63 % 59 %
Unsecured debt 10 % 14 % 15 % 17 % 22 %
Structured products and other 12 % 11 % 10 % 9 % 8 %
Preferred equity 4 % 5 % 4 % 3 % 3 %
Common equity and warrants 10 % 10 % 10 % 8 % 8 %

Weighted average yields, at current costbasis, exclusive of securities on non-accrualstatus:

Secured debt portfolio 11.5 % 11.2 % 11.0 % 10.9 % 10.9 %
Unsecured debt portfolio 11.3 % 10.9 % 11.1 % 11.1 % 11.5 %
Total debt portfolio 11.5 % 11.2 % 11.1 % 11.0 % 11.1 %

Income-bearing investment portfoliocomposition, measured at fair value:

Fixed rate amount $1.1 billion $1.3 billion $1.4 billion $1.6 billion $1.7 billion
Floating rate amount $1.5 billion $1.4 billion $1.5 billion $1.5 billion $1.5 billion
Fixed rate % 41 % 48 % 48 % 51 % 53 %
Floating rate % 59 % 52 % 52 % 49 % 47 %

Income-bearing investment portfoliocomposition, measured at cost:

Fixed rate amount $1.1 billion $1.4 billion $1.5 billion $1.7 billion $1.7 billion
Floating rate amount $1.6 billion $1.4 billion $1.5 billion $1.5 billion $1.5 billion
Fixed rate % 42 % 50 % 50 % 52 % 53 %
Floating rate % 58 % 50 % 50 % 48 % 47 %
 
 
       
APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share amounts)
 

June 30, 2015

March 31, 2015
Assets

Non-controlled/non-affiliated investments, at fair value (cost — $2,489,490and $2,514,328, respectively)

$ 2,336,435 $ 2,357,042

Non-controlled/affiliated investments, at fair value (cost — $338,429 and$297,948, respectively)

383,516 327,218

Controlled investments, at fair value (cost — $575,922 and $674,299,respectively)

593,963   665,567  
Total investments (cost — $3,403,841 and $3,486,575, respectively) 3,313,914 3,349,827
Cash 9,958 3,766
Foreign currency (cost — $2,863 and $4,856, respectively) 2,950 4,651
Receivable for investments sold 51,912 114,884
Interest receivable 28,494 43,312
Dividends receivable 9,517 5,425
Deferred financing costs 33,465 29,743
Prepaid expenses and other assets 3,784   9,283  
Total assets $ 3,453,994   $ 3,560,891  
Liabilities
Debt $ 1,390,890 $ 1,498,759
Payable for investments purchased 44,357 10,736
Dividends payable 47,348 47,348
Management and performance-based incentive fees payable 37,379 37,361
Interest payable 20,476 15,851
Accrued administrative expenses 2,400 2,000
Other liabilities and accrued expenses 14,494   11,228  
Total liabilities $ 1,557,344   $ 1,623,283  
Net Assets

Common stock, par value $.001 per share, 400,000,000 and 400,000,000common shares authorized, respectively, 236,741,351 and 236,741,351issued and outstanding, respectively

$ 237 $ 237
Paid-in capital in excess of par 3,197,715 3,197,715
Over-distributed net investment income (31,951 ) (35,589 )
Accumulated net realized loss (1,183,443 ) (1,102,517 )
Net unrealized loss (85,908 ) (122,238 )
Total net assets $ 1,896,650   $ 1,937,608  
Total liabilities and net assets $ 3,453,994   $ 3,560,891  
Net asset value per share $ 8.01   $ 8.18  
 
 
   
APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 
Three Months Ended
June 30, 2015     June 30, 2014
INVESTMENT INCOME:
From non-controlled/non-affiliated investments:
Interest $ 73,573 $ 82,547
Dividends 877 841
Other income 3,318 2,256
From non-controlled/affiliated investments:
Interest 227 2,226
Dividends 9,166 3,946
Other income 157 43
From controlled investments:
Interest 10,554 8,850
Dividends 3,731 1,808
Other income 63     63  

Total investment income

$ 101,666     $ 102,580  
EXPENSES:
Management fees $ 17,352 $ 18,111
Performance-based incentive fees 11,867 12,467
Interest and other debt expenses 22,436 18,902
Administrative services expense 1,434 1,433
Other general and administrative expenses 2,163     2,288  

Total expenses

55,252     53,201  
Management and performance-based incentive fees waived $ (4,515

)

 

$ (4,152 )
Expense reimbursements (57

)

 

(20 )
Net expenses $ 50,680     $ 49,029  
Net investment income $ 50,986     $ 53,351  

REALIZED AND UNREALIZED GAIN (LOSS) ONINVESTMENTS, CASH EQUIVALENTS, FOREIGNCURRENCIES AND DERIVATIVES:

Net realized gain (loss):
Investments and cash equivalents
Non-controlled/non-affiliated investments $ (42,660

)

 

$ (11,716 )
Non-controlled/affiliated investments (67 ) (107 )
Controlled investments (42,862

)

 

—
Foreign currency transactions 4,663     (1,510 )
Net realized loss $ (80,926

)

 

$ (13,333 )
Net change in unrealized gain (loss):
Investments and cash equivalents
Non-controlled/non-affiliated investments $ 4,232 $ 2,595
Non-controlled/affiliated investments 15,817 10,830
Controlled investments 26,773 11,380
Foreign currency translations (10,492

)

 

(387 )
Net change in unrealized gain $ 36,330     $ 24,418  

Net realized and unrealized gain (loss) from investments, cashequivalents, and foreign currencies

(44,596

)

 

11,085  

NET INCREASE IN NET ASSETS RESULTING FROMOPERATIONS

$ 6,390     $ 64,636  
EARNINGS PER SHARE — BASIC $ 0.03     $ 0.27  
EARNINGS PER SHARE — DILUTED $ 0.03     $ 0.27  
 
 

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.

Apollo Investment Corporation
Elizabeth Besen, 212-822-0625
Investor Relations Manager
[email protected]

Source: Apollo Investment Corporation


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