PhenixFIN Corporation Announces Third Quarter 2021

NEW YORK, Aug. 11, 2021 (Globalrelease Wire) — PhenixFIN Corporation (NASDAQ: PFX) (the “Company”), a publicly traded business development company, today announced its financial results for the fiscal third quarter of 2021.

Third Quarter 2021 Highlights

  • Total investment income of $8.7 million; net investment income of $5.4 million
  • $52.9 million in cash on June 30, 2021
  • Net asset value of $156.7 million, or $58.49 per share as of June 30, 2021 vs. $55.30 per share as of September 30, 2020

David Lorber, Chief Executive Officer of the Company, stated: “We are pleased with our performance during the first two quarters of being an internally-managed company. We are encouraged by the improvement in NAV and potential opportunities to deploy capital.”

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, 44,788 shares were repurchased through June 30, 2021. In aggregate through August 10, 2021 64,788 shares have been repurchased at an average price of $32.74/share.

Third Quarter 2021 Financial Results

For the quarter ended June 30, 2021, investment income totaled $8.7 million, of which $8.6 million was attributable to portfolio interest and dividend income and $0.1 million was attributable to fee income.

For the quarter ended June 30, 2020, investment income totaled $4.3 million, of which $4.1 million was attributable to portfolio interest and dividend income, and $0.2 million to fee income.

For the quarter ended June 30, 2021, total net expenses were $3.3 million and for the quarter ended June 30, 2020, total net expenses were $5.4 million.

For the quarter ended June 30, 2021, the Company recorded a net realized gain of $0.1 million and net unrealized appreciation of $1.5 million. For the quarter ended June 30, 2020, the Company recorded a net realized loss of $(37.9) million and net unrealized appreciation of $46.9 million.

Portfolio and Investment Activities

As of June 30, 2021, the fair value of the Company’s investment portfolio totaled $181.6 million and consisted of 42 portfolio companies.

As of June 30, 2021, the Company had 10 portfolio company investments on non-accrual status with a fair market value of $13.6 million.

Liquidity and Capital Resources

At June 30, 2021, the Company had $52.9 million in cash and $77.8 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 perform well and operate effectively under an internalized management structure, 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 [email protected]

PHENIXFIN CORPORATION
Consolidated Statements of Assets and Liabilities

    June 30,
2021 (Unaudited)
    September 30,
2020
 
Assets:            
Investments at fair value            
Non-controlled, non-affiliated investments (amortized cost of $109,219,571 and $117,360,954, respectively)   $ 105,407,064     $ 114,321,948  
Affiliated investments (amortized cost of $78,821,547 and $92,898,755, respectively)     68,722,983       84,873,023  
Controlled investments (amortized cost of $37,489,171 and $117,874,821, respectively)     7,488,473       47,548,578  
Total Investments at fair value     181,618,520       246,743,549  
Cash and cash equivalents     52,864,911       56,522,148  
Receivables:                
Interest receivable     289,832       624,524  
Fees receivable     106,528       119,028  
Dividends receivable     66,445        
Other assets     1,003,437       2,093,559  
Total Assets   $ 235,949,673     $ 306,102,808  
                 
Liabilities:                
Notes payable (net of debt issuance costs of $482,346 and $905,624, respectively)   $ 77,364,454     $ 150,960,662  
Interest and fees payable           801,805  
Due to affiliate           53,083  
Due to broker     284,067        
Management and incentive fees payable           1,392,022  
Administrator expenses payable     60,685       156,965  
Accounts payable and accrued expenses     1,547,888       2,108,225  
Deferred revenue     14,003       10,529  
Total Liabilities     79,271,097       155,483,291  
                 
Commitments and Contingencies                
                 
Net Assets:                
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,678,921 and 2,723,709 common shares outstanding, respectively     2,679       2,724  
Capital in excess of par value     670,122,430       672,381,617  
Total distributable earnings (loss)     (513,446,533 )     (521,764,824 )
Total Net Assets   $ 156,678,576     $ 150,619,517  
Total Liabilities and Net Assets   $ 235,949,673     $ 306,102,808  
                 
Net Asset Value Per Common Share   $ 58.49     $ 55.30  
                 

PHENIXFIN CORPORATION
Consolidated Statements of Operations
(Unaudited)

    For the Three Months Ended
June 30
    For the Nine Months Ended
June 30
 
    2021     2020     2021     2020  
Interest Income:                        
Interest from investments                        
Non-controlled, non-affiliated investments:                        
Cash   $ 1,578,657       1,961,009     $ 4,785,374       7,499,171  
Payment in-kind     186,733       138,018       356,762       465,339  
Affiliated investments:                                
Cash     249,157       291,569       797,776       691,010  
Payment in-kind     286,444       487,065       286,444       2,141,327  
Controlled investments:                                
Cash                       84,505  
Payment in-kind                       500,767  
Total interest income     2,300,991       2,877,661       6,226,356       11,382,119  
Dividend income     6,307,408       1,225,000       20,979,143       4,725,000  
Interest from cash and cash equivalents     3,862       4,319       5,308       376,747  
Fee income     71,443       202,122       650,323       617,654  
Other income                 78,204        
Total Investment Income     8,683,704       4,309,102       27,939,334       17,101,520  
Expenses:                                
Base management fees           1,317,223       1,146,403       4,966,728  
Interest and financing expenses     1,260,825       2,736,136       4,538,520       12,312,183  
General and administrative expenses     294,022       540,066       856,396       3,140,305  
Salaries and Benefits     679,229             1,011,546        
Administrator expenses     106,578       614,535       546,372       1,742,419  
Insurance expenses     444,832       333,816       1,404,312       988,394  
Directors fees     179,000       347,500       875,217       960,000  
Professional fees, net     289,200       (511,519 )     113,797       (4,796,964 )
Expenses before expense support reimbursement and management and incentive fee waivers     3,253,686       5,377,757       10,492,563       19,313,065  
Expense support reimbursement           (349,427 )           (349,427 )
Total expenses net of expense support reimbursement and management and incentive fee waivers     3,253,686       5,028,330       10,492,563       18,963,638  
Net Investment Income     5,430,018       (719,228 )     17,446,771       (1,862,118 )
Realized and unrealized gains (losses) on investments                                
Net realized gains (losses):                                
Non-controlled, non-affiliated investments     38,852       (532,253 )     4,093,500       (690,167 )
Affiliated investments     19,811             (10,433,117 )      
Controlled investments     1,850       (37,389,588 )     (40,145,720 )     (39,076,425 )
Total net realized gains (losses)     60,513       (37,921,841 )     (46,485,337 )     (39,766,592 )
Net change in unrealized gains (losses):                                
Non-controlled, non-affiliated investments     (1,794,173 )     7,379,695       (773,501 )     (8,422,875 )
Affiliated investments     1,513,353       8,137,213       (2,072,831 )     2,558,480  
Controlled investments     1,759,025       31,389,160       40,325,544       (17,062,311 )
Total net change in unrealized gains (losses)     1,478,205       46,906,068       37,479,212       (22,926,706 )
Change in provision for deferred taxes on unrealized (appreciation) depreciation on investments           35,970             (49,694 )
Loss on extinguishment of debt           (697,191 )     (122,355 )     (2,481,374 )
Total realized and unrealized gains (losses)     1,538,718       8,323,006       (9,128,480 )     (65,224,366 )
Net Increase (Decrease) in Net Assets Resulting from Operations   $ 6,968,736     $ 7,603,778     $ 8,318,291     $ (67,086,484 )
Weighted Average Basic and diluted earnings per common share   $ 2.60     $ 2.79     $ 3.07     $ (24.63 )
Weighted Average Basic and diluted net investment income (loss) per common share   $ 2.02     $ (0.26 )   $ 6.44     $ (0.68 )
Weighted Average Common Shares Outstanding – Basic and Diluted     2,683,093       2,723,711       2,707,794       2,723,711  

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