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Earnings per share: Q1 2024 was reported at $0.39, below expectations of $0.43.
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Net investment income: It reached $28.5 million, just above the estimated $28.45 million.
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Revenue: Total investment income was $68.33 million, lower than estimated income of $69.36 million.
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dividend: The company declared a quarterly dividend of $0.38 per share, payable on June 27, 2024.
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Net asset value (NAV): The stock price increased slightly from $15.41 per share as of December 31, 2023 to $15.42 per share as of March 31, 2024.
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Portfolio activities: Net investment activity had a positive change, with new investments of $15.9 million after repayments.
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Leverage and liquidity: The debt-to-equity ratio was reported at 1.40x, down slightly from the prior quarter.
On May 7, 2024, MidCap Financial Investment Corp (NASDAQ:MFIC) disclosed its financial results for the first quarter ended March 31, 2024 through its 8-K filing. The company reported net investment income of $0.44 per share, roughly in line with analyst estimates of $0.43 per share. This result reflects a slight decrease from $0.46 per share in the prior quarter. Net asset value (NAV) per share as of March 31, 2024 was $15.42, a slight increase from $15.41 as of December 31, 2023.
MidCap Financial Investment Corp., managed by Apollo Investment Management, focuses primarily on first-lien secured loans to mid-market companies in the United States. The company’s strategic approach includes a diversified investment portfolio primarily in the middle market sector, as evidenced by its stable credit performance and portfolio risk mitigation activity recorded during the quarter.
Financial highlights and portfolio activities
The company’s total assets decreased slightly to $2.45 billion from $2.5 billion in the previous quarter. The company’s investment portfolio was valued at $2.35 billion. The debt-to-equity ratio is 1.40x, slightly lower than his 1.45x in the previous quarter, indicating a modest leverage situation. During the quarter, MFIC made new investments totaling $152.8 million and reported net investment activity after repayments of $15.9 million.
CEO Tanner Powell highlighted the solid performance and strategic benefits of the company’s diversified investment approach. Powell also anticipates a proposed merger with Apollo Senior Floating Rate Fund and Apollo Tactical Income Fund to create a larger business development company focused on middle market direct lending. We also discussed the benefits of
Operational and market challenges
Despite its stable financial performance, MFIC faced challenges unique to the asset management industry, including market volatility and competitive pressures in middle market lending. These challenges are illustrated by the slight decrease in net investment income per share from $0.45 to $0.44 year-over-year. Additionally, the company did not repurchase any shares during the quarter, maintaining a cautious approach to its capital return strategy.
Liquidity and capital resources
As of March 31, 2024, MFIC’s liquidity position included cash and cash equivalents of $49.6 million. The company’s total debt is $1.412 billion, with various bonds maturing between 2025 and 2028. The remaining capacity available under the Multicurrency Revolving Credit Facility was $1,063 million, subject to compliance with borrowing standards.
Looking to the future
MidCap Financial Investment Corp.’s near-term outlook is cautiously optimistic, with a strategic merger on the horizon that is expected to improve its market position and financial robustness. The company’s adherence to a prudent investment strategy and focus on first lien loans should continue to support its goal of generating recurring income while effectively managing investment risk.
Investors and stakeholders are encouraged to participate in the next conference call, scheduled for May 8, 2024, to further discuss these results and future strategies.
For further information and detailed financial data, interested parties are encouraged to review the supplementary information package available on the Company’s website. This provides greater transparency into MFIC’s financial results and management strategy.
For more information, please see the full 8-K earnings release from MidCap Financial Investment Corp here.
This article first appeared on GuruFocus.
