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Logan Ridge Finance (LRFC) Q2 Earnings Lag Estimates, Costs Dip
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Logan Ridge Finance Corporation (LRFC - Free Report) recorded second-quarter 2021 net investment income of 1 cent per share. The Zacks Consensus Estimate was pegged at income of 31 cents. The bottom line compared favorably with net investment loss of 22 cents incurred in the prior-year quarter.
Results were hurt by lower total investment income. However, a decline in expenses provided some support. The company’s portfolio activity remained decent.
Net investment income was $34 million against net investment loss of $609 million in the prior year period.
Total Investment Income & Expenses Decline
Total investment income in the quarter was $5 million, down 27.9% year over year. The decline was primarily due to a fall in total interest and fee income, and total payment-in-kind interest and dividend income.
Total expenses decreased 34.1% year over year to $5 million. The fall was mainly due to lower interest and financing expenses, base management fees, and general and administrative expenses.
Strong Balance Sheet
As of Jun 30, 2021, cash and cash equivalents totaled $26.1 million, down from $49.9 million as of Dec 31, 2020.
As of Jun 30, 2021, Logan Ridge Finance’s total borrowings were $149.9 million. This comprised $25.0 million drawn under the KeyBank credit facility, $72.8 million of 6.0% fixed-rate notes due 2022 and $52.1 million of 5.75% fixed-rate convertible notes due 2022.
Net asset value was $41.96 per share, up from $40.19 at the end of Dec 31, 2020.
Portfolio Activities Decent
The fair value of the company’s total investment portfolio was $228 million as of Jun 30, 2021. The company had investments in 32 portfolio companies.
During the reported quarter, Logan Ridge Finance made nearly $10 million of investments and had roughly $33.5 million in repayments and sales. This resulted in net repayments and sales of $23.5 million for the period.
Our Take
Driven by the rise in demand for financing, Logan Ridge Finance’s investment income is expected to grow in the near term. Moreover, lower expenses are likely to aid profitability.
Logan Ridge Finance Corporation Price, Consensus and EPS Surprise
Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2021 net investment income of 32 cents per share was in line with the Zacks Consensus Estimate. The figure indicates no change from the year-ago quarter’s reported number.
Goldman Sachs BDC’s (GSBD - Free Report) second-quarter 2021 net investment income of 57 cents per share beat the Zacks Consensus Estimate of 48 cents. This included purchase discount amortization of 9 cents per share related to its merger with Goldman Sachs Middle Market Lending Corp in October 2020.
FS KKR Capital Corp.’s (FSK - Free Report) second-quarter 2021 adjusted net investment income per share of 74 cents surpassed the Zacks Consensus Estimate of 61 cents. In the prior-year quarter, the company reported earnings of 62 cents. The reported quarter’s results exclude accretion resulting from the merger with FS KKR Capital Corp. II.
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Logan Ridge Finance (LRFC) Q2 Earnings Lag Estimates, Costs Dip
Logan Ridge Finance Corporation (LRFC - Free Report) recorded second-quarter 2021 net investment income of 1 cent per share. The Zacks Consensus Estimate was pegged at income of 31 cents. The bottom line compared favorably with net investment loss of 22 cents incurred in the prior-year quarter.
Results were hurt by lower total investment income. However, a decline in expenses provided some support. The company’s portfolio activity remained decent.
Net investment income was $34 million against net investment loss of $609 million in the prior year period.
Total Investment Income & Expenses Decline
Total investment income in the quarter was $5 million, down 27.9% year over year. The decline was primarily due to a fall in total interest and fee income, and total payment-in-kind interest and dividend income.
Total expenses decreased 34.1% year over year to $5 million. The fall was mainly due to lower interest and financing expenses, base management fees, and general and administrative expenses.
Strong Balance Sheet
As of Jun 30, 2021, cash and cash equivalents totaled $26.1 million, down from $49.9 million as of Dec 31, 2020.
As of Jun 30, 2021, Logan Ridge Finance’s total borrowings were $149.9 million. This comprised $25.0 million drawn under the KeyBank credit facility, $72.8 million of 6.0% fixed-rate notes due 2022 and $52.1 million of 5.75% fixed-rate convertible notes due 2022.
Net asset value was $41.96 per share, up from $40.19 at the end of Dec 31, 2020.
Portfolio Activities Decent
The fair value of the company’s total investment portfolio was $228 million as of Jun 30, 2021. The company had investments in 32 portfolio companies.
During the reported quarter, Logan Ridge Finance made nearly $10 million of investments and had roughly $33.5 million in repayments and sales. This resulted in net repayments and sales of $23.5 million for the period.
Our Take
Driven by the rise in demand for financing, Logan Ridge Finance’s investment income is expected to grow in the near term. Moreover, lower expenses are likely to aid profitability.
Logan Ridge Finance Corporation Price, Consensus and EPS Surprise
Logan Ridge Finance Corporation price-consensus-eps-surprise-chart | Logan Ridge Finance Corporation Quote
Currently, Logan Ridge Finance carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2021 net investment income of 32 cents per share was in line with the Zacks Consensus Estimate. The figure indicates no change from the year-ago quarter’s reported number.
Goldman Sachs BDC’s (GSBD - Free Report) second-quarter 2021 net investment income of 57 cents per share beat the Zacks Consensus Estimate of 48 cents. This included purchase discount amortization of 9 cents per share related to its merger with Goldman Sachs Middle Market Lending Corp in October 2020.
FS KKR Capital Corp.’s (FSK - Free Report) second-quarter 2021 adjusted net investment income per share of 74 cents surpassed the Zacks Consensus Estimate of 61 cents. In the prior-year quarter, the company reported earnings of 62 cents. The reported quarter’s results exclude accretion resulting from the merger with FS KKR Capital Corp. II.