PhenixFIN Corporation Announces Second Quarter 2021 Financial Results

PhenixFIN Corporation Announces Second Quarter 2021 Financial Results




PhenixFIN Corporation Announces Second Quarter 2021 Financial Results

NEW YORK, May 12, 2021 (GLOBE NEWSWIRE) — PhenixFIN Corporation (NASDAQ: PFX) (the “Company”), a publicly traded business development company, today announced its financial results for the fiscal second quarter of 2021.

Second Quarter 2021 Highlights

  • Total investment income of $6.5 million; net investment income of $3.7 million
  • $59.1 million in cash on March 31, 2021
  • Net asset value of $151.2 million, or $55.91 per share as of March 31, 2021 vs. $55.30 per share as of September 30, 2020

The quarter ended March 31, 2021 represented the first quarter of operations under the Company’s new internalized management structure.

David Lorber, Chief Executive Officer of the Company, stated: “We are pleased with the smooth transition to an internally-managed company and with our performance during the quarter. We are generally encouraged by potential opportunities to enhance value within the legacy portfolio and deploy capital, as we look to achieve our investment objective of generating current income and capital appreciation. In addition, we continue to realize efficiencies in operating under our internalized management structure.”

On January 11, 2021, the Company announced that the Board of Directors approved a share repurchase program authorizing up to $15 million in share repurchases. Under the share repurchase program, the Company is authorized to repurchase from time to time its common stock in open market or other transactions, subject to applicable regulatory requirements. Under this program, 19,773 shares were repurchased through March 31, 2021. In aggregate through May 11, 2021 43,988 shares have been repurchased at an average price of $32.52/share.

Second Quarter 2021 Financial Results

For the quarter ended March 31, 2021, investment income totaled $6.4 million, of which $6.1 million was attributable to portfolio interest and dividend income, $0.2 million was attributable to fee income, and $0.1 million was attributable to other income.

For the quarter ended March 31, 2020, investment income totaled $5.3 million, of which $5.2 million was attributable to portfolio interest and dividend income, and $0.1 million to fee income.

For the quarter ended March 31, 2021, total net expenses were $2.8 million and for the quarter ended March 31, 2020, total net expenses were $9.5 million.

For the quarter ended March 31, 2021, the Company recorded a net realized gain of $0.2 million and net unrealized appreciation of $3.9 million. For the quarter ended March 31, 2020, the Company recorded a net realized loss of $(0.1) million and net unrealized depreciation of $(73.6) million.

Portfolio and Investment Activities

As of March 31, 2021, the fair value of the Company’s investment portfolio totaled $168.2 million and consisted of 38 portfolio companies.

As of March 31, 2021, the Company had 10 portfolio company investments on non-accrual status with a fair market value of $16.7 million.

Liquidity and Capital Resources

At March 31, 2021, the Company had $59.1 million in cash and $77.3 million outstanding in aggregate principal amount of 6.125% unsecured notes due 2023.

ABOUT PHENIXFIN CORPORATION

PhenixFIN Corporation is a non-diversified, internally managed closed-end management investment company incorporated in Delaware that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. We completed our initial public offering and commenced operations on January 20, 2011. The Company has elected, and intends to qualify annually, to be treated, for U.S. federal income tax purposes, as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Effective January 1, 2021, the Company operates under an internalized management structure.

SAFE HARBOR STATEMENT AND OTHER DISCLOSURES

This press release contains “forward-looking” statements. Such forward-looking statements reflect current views with respect to future events and financial performance, and the Company may make related oral forward-looking statements on or following the date hereof. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, including among other things, PhenixFIN’s ability to deliver value to shareholders, implement its investment objective, capitalize on investment opportunities and continue to realize efficiencies, and other factors that are enumerated in the Company’s periodic filings with the Securities and Exchange Commission. PhenixFIN Corporation disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release.

The press release contains unaudited financial results. For ease of review, we have excluded the word “approximately” when rounding the results. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to sell shares of PhenixFIN Corporation’s common stock. There can be no assurance that PhenixFIN Corporation will achieve its investment objective. 

For PhenixFIN investor relations, please call 212-859-0390. For media inquiries, please contact info@phenixfc.com.

PHENIXFIN CORPORATION
Consolidated Statements of Assets and Liabilities

    March 31,
2021
(Unaudited)
    September 30,
2020
 
Assets:            
Investments at fair value            
Non-controlled, non-affiliated investments (amortized cost of $95,301,443 and $117,360,954, respectively)   $ 93,283,110     $ 114,321,948  
Affiliated investments (amortized cost of $79,845,752 and $92,898,755, respectively)     68,233,836       84,873,023  
Controlled investments (amortized cost of $38,487,321 and $117,874,821, respectively)     6,727,597       47,548,578  
Total Investments at fair value     168,244,543       246,743,549  
Cash and cash equivalents     59,092,731       56,522,148  
Receivables:                
Interest receivable     299,655       624,524  
Fees receivable     106,528       119,028  
Other receivable     398,551        
Prepaid share repurchases     164,258        
Other assets     1,210,724       2,093,559  
Total Assets   $ 229,516,990     $ 306,102,808  
                 
Liabilities:                
Notes payable (net of debt issuance costs of $551,142 and $905,624, respectively)   $ 77,295,658     $ 150,960,662  
Interest and fees payable           801,805  
Due to affiliates           53,083  
Management and incentive fees payable           1,392,022  
Administrator expenses payable     94,958       156,965  
Accounts payable and accrued expenses     918,279       2,108,225  
Deferred revenue     30,970       10,529  
Total Liabilities     78,339,865       155,483,291  
                 
Commitments and Contingencies                
                 
Net Assets:                
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,703,936 and 2,723,709 common shares issued and outstanding, respectively     2,704       2,724  
Capital in excess of par value     671,589,690       672,381,617  
Total distributable earnings/(loss)     (520,415,269 )     (521,764,824 )
Total Net Assets   $ 151,177,125     $ 150,619,517  
Total Liabilities and Net Assets   $ 229,516,990     $ 306,102,808  
                 
Net Asset Value Per Common Share   $ 55.91     $ 55.30  

PHENIXFIN CORPORATION
Consolidated Statements of Operations
(Unaudited)

    For the Three
Months Ended

March 31
    For the Six
Months Ended

March 31
 
    2021     2020     2021     2020  
Interest Income:                        
Interest from investments                        
Non-controlled, non-affiliated investments:                        
Cash   $ 1,534,904       2,320,453     $ 3,206,717       5,538,162  
Payment in-kind           128,309       170,029       327,321  
Affiliated investments:                                
Cash     196,328       190,193       548,619       399,441  
Payment in-kind           706,789             1,654,262  
Controlled investments:                                
Cash     (1,190 )     1,297             84,505  
Payment in-kind           5,385             500,767  
Total interest income     1,730,042       3,352,426       3,925,365       8,504,458  
Dividend income     4,408,234       1,662,500       14,671,735       3,500,000  
Interest from cash and cash equivalents     506       154,290       1,446       372,428  
Fee income     237,416       131,992       578,880       415,532  
Other income     78,204             78,204        
Total Investment Income     6,454,402       5,301,208       19,255,630       12,792,418  
                                 
Expenses:                                
Base management fees           1,641,271       1,146,403       3,649,505  
Interest and financing expenses     1,260,054       4,432,118       3,277,695       9,576,047  
General and administrative expenses     104,440       2,083,397       466,049       2,600,239  
Salaries and Benefits     332,317             332,317        
Administrator expenses     (44,618 )     576,362       439,794       1,127,884  
Insurance expenses     474,468       356,580       959,480       654,578  
Directors fees     220,500       296,500       696,217       612,500  
Professional fees, net     420,220       130,630       (79,077 )     (4,285,445 )
Total expenses net of expense support reimbursement and management and incentive fee waivers     2,767,381       9,516,858       7,238,878       13,935,308  
Net Investment Income     3,687,021       (4,215,650 )     12,016,752       (1,142,890 )
                                 
Realized and unrealized gains (losses) on investments                                
Net realized gains (losses):                                
Non-controlled, non-affiliated investments     160,926       (100,115 )     4,054,648       (157,914 )
Affiliated investments                 (10,452,928 )      
Controlled investments                 (40,147,570 )     (1,686,837 )
Total net realized gains (losses)     160,926       (100,115 )     (46,545,850 )     (1,844,751 )
Net change in unrealized gains (losses):                                
Non-controlled, non-affiliated investments     5,077,737       (19,549,944 )     1,020,673       (15,802,570 )
Affiliated investments     (1,467,862 )     (15,019,332 )     (3,586,184 )     (5,578,733 )
Controlled investments     329,584       (38,994,357 )     38,566,519       (48,451,471 )
Total net change in unrealized gains (losses)     3,939,459       (73,563,633 )     36,001,008       (69,832,774 )
Change in provision for deferred taxes on unrealized (appreciation)/ depreciation on investments           (85,664 )           (85,664 )
Loss on extinguishment of debt           (895,033 )     (122,355 )     (1,784,183 )
Total realized and unrealized gains (losses)     4,100,385       (74,644,445 )     (10,667,197 )     (73,547,372 )
                                 
Net Increase (Decrease) in Net Assets Resulting from Operations   $ 7,787,406     $ (78,860,095 )   $ 1,349,555     $ (74,690,262 )
                                 
Weighted Average Basic and diluted earnings per common share   $ 2.87     $ (28.95 )   $ 0.50     $ (27.42 )
Weighted Average Basic and diluted net investment income (loss) per common share   $ 1.36     $ (1.55 )   $ 4.42     $ (0.42 )
Weighted Average Common Shares Outstanding – Basic and Diluted     2,716,627       2,723,711 (1)     2,720,226       2,723,711 (1)

 (1) Basic and diluted shares has been adjusted for 2020 to reflect the one-for-twenty reverse stock split effected on July 24, 2020 on a retroactive basis.