SOURCE: Apollo Investment Corporation

Apollo Investment Corporation

November 08, 2013 07:30 ET

Apollo Investment Corporation Reports Financial Results for the Quarter Ended September 30, 2013

NEW YORK, NY--(Marketwired - Nov 8, 2013) - Apollo Investment Corporation (NASDAQ: AINV)

Fiscal Second Quarter Highlights:

  • Net investment income per share for the quarter was $0.22, compared to $0.25 for the quarter ended June 30, 2013

  • Net asset value per share at the end of the quarter was $8.30, compared to $8.16 at June 30, 2013, a 2% increase

  • Declared a dividend of $0.20 per share for the quarter

  • Invested $412 million during the quarter, substantially driven by primary originations

  • Net investment activity was $(59) million for the quarter due to opportunistic exits

  • Amended revolving credit facility to extend maturity, improve pricing, and increase commitments

Apollo Investment Corporation (NASDAQ: AINV) or the "Company," or "Apollo Investment," today announced financial results for its second fiscal quarter ended September 30, 2013. The Company's net investment income was $0.22 per share for the quarter ended September 30, 2013, compared to $0.25 for the quarter ended June 30, 2013. The Company's net asset value ("NAV") was $8.30 per share as of September 30, 2013, up from $8.16 at June 30, 2013.

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 2014, payable on January 6, 2014 to stockholders of record as of December 19, 2013. 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, said, "For the September quarter, we reported healthy net investment income and a meaningful increase in net asset value. Given the strength in the credit markets throughout the period, we monetized select assets with minimal impact to the overall portfolio yield." Mr. Zelter continued, "We also continued to improve our capital structure by lowering the pricing, extending the maturity, and increasing the size of our revolving credit facility." 

 
FINANCIAL HIGHLIGHTS FOR THE QUARTER ENDED SEPTEMBER 30, 2013
 
Select Balance Sheet Data
    September 30, 2013   March 31, 2013
Total assets   $ 3.14 billion   $ 2.94 billion
Investment portfolio   $ 3.03 billion   $ 2.85 billion
Debt   $ 1.08 billion   $ 1.16 billion
Net assets   $ 1.86 billion   $ 1.68 billion
Net asset value per share   $ 8.30   $ 8.27
Debt-to-equity     0.58 x     0.69 x
Leverage Ratio (1)     0.62 x     0.70 x
             

(1) The Company's leverage ratio is defined as debt outstanding plus payable for investments purchased and cash equivalents, plus due to custodian, less receivable for investments sold, less cash equivalents, less cash, less foreign currency, divided by total net assets.

 
 
Portfolio Activity (2) and Portfolio Companies
 
    Three months ended
September 30, 2013
  Six months ended
September 30, 2013
Investments made during the period   $ 412 million   $ 1,200 million
Investments sold   $ (284) million   $ (390) million
Net activity before repaid investments   $ 127 million   $ 810 million
Investments repaid   $ (186) million   $ (661) million
Net investment activity   $ (59) million   $ 149 million
             
Portfolio companies, at beginning of period     94     81
New portfolio companies     12     35
Exited portfolio companies     13     23
Portfolio companies, at end of period     93     93
             

(2) Numbers may not sum due to rounding.

   
   
Operating Results  
   
    Three months ended
September 30, 2013
  Six months ended
September 30, 2013
 
(in thousands)              
Net investment income   $ 49,586   $ 101,953  
Net realized and unrealized loss   $ 26,839   $ (6,724 )
Net increase in net assets from operations   $ 76,425   $ 95,229  
               
(per share)              
Net investment income per share   $ 0.22   $ 0.47  
Net realized and unrealized loss per share   $ 0.12   $ (0.04 )
Earnings per share - basic   $ 0.34   $ 0.43  
Earnings per share - diluted   $ 0.33   $ 0.43  
               

CONFERENCE CALL / WEBCAST AT 10:00 AM EST ON November 8, 2013

The Company will host a conference call on Friday, November 8, 2013 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 # 83833351 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 22, 2013 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 83833351. 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.

PORTFOLIO AND INVESTMENT ACTIVITY

During the three months ended September 30, 2013, we invested $412 million across 12 new and 18 existing portfolio companies, through a combination of primary and secondary market purchases. This compares to investing $395 million in 13 new and 11 existing portfolio companies for the three months ended September 30, 2012. Investments sold or repaid during the three months ended September 30, 2013 totaled $470 million versus $343 million for the three months ended September 30, 2012.

At September 30, 2013, our portfolio consisted of 93 portfolio companies and was invested 52% in secured debt, 34% in unsecured debt, 6% in structured products and other and 8% in common equity, preferred equity and warrants measured at fair value versus 81 portfolio companies invested 44% in secured debt, 43% in unsecured debt, 7% in structured products and other and 6% in common equity, preferred equity and warrants, measured at fair value at March 31, 2013.

The weighted average yields on our secured debt portfolio, unsecured debt portfolio, and total debt portfolio as of September 30, 2013 at our current cost basis were 11.1%, 11.7%, and 11.3%, respectively, exclusive of securities on non-accrual status. The weighted average yields on our secured loan portfolio, unsecured debt portfolio, and total debt portfolio as of March 31, 2013 at the current cost basis were 11.2%, 12.7%, and 11.9%, respectively, exclusive of securities on non-accrual status.

Since the initial public offering of Apollo Investment in April 2004, and through September 30, 2013, invested capital totaled $11.5 billion in 250 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.

At September 30, 2013, 62% or $1.7 billion of our income-bearing investment portfolio was fixed rate and 38% or $1.0 billion was floating rate, measured at fair value. On a cost basis, 63% or $1.7 billion of our income-bearing investment portfolio was fixed rate and 37% or $1.0 billion is floating rate. At March 31, 2013, 64% or $1.6 billion of our income-bearing debt investment portfolio was fixed rate debt and 36% or $0.9 billion was floating rate debt, measured at fair value. On a cost basis, 65% or $1.6 billion of our income-bearing investment portfolio was fixed rate debt and 35% or $0.9 billion was floating rate debt.

   
   
APOLLO INVESTMENT CORPORATION  
STATEMENTS OF ASSETS AND LIABILITIES  
(in thousands, except per share amounts)  
   
    September 30,
2013
(unaudited)
    March 31, 2013  
Assets            
Non-controlled/non-affiliated investments, at fair value (cost-$2,564,848 and $2,550,091, respectively)   $ 2,537,934     $ 2,414,307  
Non-controlled /affiliated investments, at fair value (cost-$154,323 and $124,006, respectively)     142,024       125,674  
Controlled investments, at fair value (cost-$361,731 and $345,204, respectively)     349,748       310,418  
Cash     4,510       3,902  
Foreign currency (cost-$1,566 and $2,293, respectively)     1,574       2,295  
Receivable for investments sold     22,324       5,713  
Interest receivable     42,598       51,990  
Dividends receivable     3,943       2,703  
Deferred financing costs     34,302       26,990  
Prepaid expenses and other assets     859       320  
    Total assets   $ 3,139,816     $ 2,944,312  
                 
Liabilities                
Debt   $ 1,082,270     $ 1,156,067  
Payable for investments purchased     99,655       26,021  
Dividends payable     44,948       40,578  
Management and performance-based incentive fees payable     28,637       26,509  
Interest payable     14,955       12,012  
Accrued administrative expenses     1,104       2,219  
Other liabilities and accrued expenses     3,603       3,517  
    Total liabilities   $ 1,275,172     $ 1,266,923  
                 
Net Assets                
Common stock, par value $.001 per share, 400,000,000 and 400,000,000 common shares authorized, respectively, and 224,741,351 and 202,891,351 issued and outstanding, respectively   $ 225     $ 203  
Paid-in capital in excess of par     3,115,537       2,933,636  
Over-distributed net investment income     (32,127 )     (44,183 )
Accumulated net realized loss     (1,166,288 )     (1,053,080 )
Net unrealized depreciation     (52,703 )     (159,187 )
    Total net assets   $ 1,864,644     $ 1,677,389  
    Total liabilities and net assets   $ 3,139,816     $ 2,944,312  
Net asset value per share   $ 8.30     $ 8.27  
                 
                 
                 
APOLLO INVESTMENT CORPORATION  
STATEMENTS OF OPERATIONS (unaudited)  
(in thousands, except per share amounts)  
   
    Three months ended     Six months ended  
    September 30, 2013     September 30, 2012     September 30, 2013     September 30, 2012  
INVESTMENT INCOME:                        
From non-controlled/non-affiliated investments:                                
  Interest   $ 79,228     $ 70,275     $ 154,789     $ 142,912  
  Dividends     430       1,012       4,694       2,018  
  Other income     2,217       4,455       6,693       8,498  
From non-controlled/affiliated investments:                                
  Interest     1,025       -       1,728       -  
  Dividends     4,738       750       9,564       1,500  
From controlled investments:                                
  Interest     5,668       1,316       10,577       2,594  
  Dividends     364       6,024       2,260       6,642  
  Other income     38       -       75       -  
    Total investment income   $ 93,708     $ 83,832     $ 190,380     $ 164,164  
                                 
EXPENSES:                                
  Management fees   $ 15,356     $ 13,864     $ 30,113     $ 27,684  
  Performance-based incentive fees     11,545       10,942       23,994       20,458  
  Interest and other debt expenses     17,472       12,529       33,316       28,106  
  Administrative services expense     1,109       769       2,206       1,519  
  Other general and administrative expenses     1,974       1,961       4,105       4,564  
    Total expenses     47,456       40,065       93,734       82,331  
  Management and performance-based incentive fees waived     (3,326 )     (715 )     (5,299 )     (1,380 )
  Expense reimbursements     (8 )     -       (8 )     -  
    Net expenses     44,122       39,350       88,427       80,951  
      Net investment income   $ 49,586     $ 44,482     $ 101,953     $ 83,213  
                                 
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS, DERIVATIVES AND FOREIGN CURRENCIES:                                
  Net realized loss:                                
    Investments and cash equivalents   $ (26,845 )   $ (40,773 )   $ (124,756 )   $ (59,014 )
    Foreign currencies     1,031       211       3,007       (392 )
    Derivatives     8,541       -       8,541       -  
      Net realized loss     (17,273 )     (40,562 )     (113,208 )     (59,406 )
                                 
  Net change in unrealized depreciation/appreciation:                                
    Investments and cash equivalents     60,410       76,274       117,604       36,882  
    Foreign currencies     (9,443 )     (7,158 )     (11,120 )     705  
    Derivatives     (6,855 )     -       -       -  
      Net change in unrealized depreciation/appreciation     44,112       69,116       106,484       37,587  
  Net realized and unrealized gain (loss) from investments, cash equivalents, derivatives and foreign currencies     26,839       28,554       (6,724 )     (21,819 )
                                 
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS   $ 76,425     $ 73,036     $ 95,229     $ 61,394  
EARNINGS PER SHARE - BASIC   $ 0.34     $ 0.36     $ 0.43     $ 0.30  
                                 
EARNINGS PER SHARE - DILUTED   $ 0.33     $ 0.35     $ 0.43     $ 0.30  
                                 

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 loans, mezzanine investments and/or equity in private middle market companies. The Company may also invest in the securities of public companies and structured products such as collateralized loan obligations. 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 http://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; 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.

Contact Information

  • Contact

    Elizabeth Besen
    Investor Relations Manager
    Apollo Investment Corporation
    (212) 822-0625
    ebesen@apollolp.com