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

Marketwired

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

Recent Highlights:

  • Net investment income per share for the quarter was $0.25, compared to $0.21 for the quarter ended March 31, 2013

  • Net asset value per share at the end of the quarter was $8.16, compared to $8.27 at March 31, 2013

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

  • Invested $788 million during the quarter, representing the second highest quarterly level of gross investment activity in the Company's history

  • Net investment activity was $208 million for the quarter

  • Raised $182 million of common equity and issued $150 million of 30-year senior unsecured notes during the quarter

Apollo Investment Corporation (NASDAQ: AINV) or the "Company," or "Apollo Investment," today announced financial results for its first fiscal quarter ended June 30, 2013. The Company's net investment income was $0.25 per share for the quarter ended June 30, 2013 supported by increased prepayment activity, compared to $0.21 for the quarter ended March 31, 2013. The Company's net asset value ("NAV") was $8.16 per share as of June 30, 2013 down from $8.27 at March 31, 2013. 

Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the second fiscal quarter of 2014, payable on October 4, 2013 to stockholders of record as of September 20, 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 June quarter, we reported strong net investment income and had our second highest origination quarter in our history. Our gross investment activity was driven by meaningful contributions from our specialty verticals and from opportunistic purchases in the secondary market." Mr. Zelter continued, "We further strengthened our capital structure by raising new equity and long-term debt during the period." 

FINANCIAL HIGHLIGHTS FOR THE QUARTER ENDED JUNE 30, 2013

 
 
Select Balance Sheet Data and Other Data
    June 30, 2013   March 31, 2013
Total assets   $ 3.15 billion   $ 2.94 billion
Investment portfolio   $ 3.04 billion   $ 2.85 billion
Net assets   $ 1.83 billion   $ 1.68 billion
Net asset value per share   $ 8.16   $ 8.27
Number of portfolio companies     94     81
Debt-to-equity     0.61 x     0.69 x
Leverage Ratio (1)     0.66 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
    Three months ended
June 30, 2013
Investments made during the period   $ 788 million
Number of new portfolio companies invested     23 
       
Investments sold   $ (105) million
Net activity before repaid investments   $ 683 million
       
Investments repaid   $ (475) million
Net investment activity   $ 208 million
       
Number of portfolio company exits     10
       
       
       
Operating Results  
    Three months ended
June 30, 2013
 
(in thousands)        
Net investment income   $ 52,367  
Net realized and unrealized loss   $ (33,563 )
Net increase in net assets from operations   $ 18,804  
         
(per share)        
Net investment income per share   $ 0.25  
Net realized and unrealized loss per share   $ (0.16 )
Earnings per share - basic and diluted   $ 0.09  
         
         
         

CONFERENCE CALL / WEBCAST AT 12:00 PM EDT ON AUGUST 8, 2013

The Company will host a conference call on Thursday, August 8, 2013 at 12:00 p.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 # 18399472 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 August 22, 2013 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 18399472. 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 June 30, 2013, we invested $788 million across 23 new and 23 existing portfolio companies, through a combination of primary and secondary market purchases. This compares to investing $428 million in 10 new and 9 existing portfolio companies for the three months ended March 31, 2013. Investments sold or repaid during the three months ended June 30, 2013 totaled $580 million versus $229 million for the three months ended March 31, 2013.

At June 30, 2013, our portfolio consisted of 94 portfolio companies and was invested 48% in secured debt, 39% in unsecured debt, 6% in structured products, and 7% 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 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 June 30, 2013 at our current cost basis were 11.4%, 11.8% and 11.6%, 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 our current cost basis were 11.2%, 12.7% and 11.9%, respectively.

Since the initial public offering of Apollo Investment in April 2004, and through June 30, 2013, invested capital totaled $11.1 billion in 238 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.

At June 30, 2013, 67% or $1.8 billion of our income-bearing investment portfolio was fixed rate and 33% or $0.9 billion was floating rate, measured at fair value. On a cost basis, 68% or $1.8 billion of our income-bearing investment portfolio was fixed rate and 32% or $0.9 billion was 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 is 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)  
             
    June 30, 2013
(unaudited)
    March 31, 2013  
Assets                
Non-controlled/non-affiliated investments, at fair value (cost - $2,634,689 and $2,550,091, respectively)   $ 2,571,788     $ 2,414,307  
Non-controlled /affiliated investments, at fair value (cost - $29,340 and $0, respectively)     16,582       --  
Controlled investments, at fair value (cost - $487,447 and $469,210, respectively)     451,411       436,092  
Derivatives, net at fair value (proceeds $(4,156) and $0, respectively)     2,699       --  
Cash     10,053       3,902  
Foreign currency (cost - $7,164 and $2,293, respectively)     7,031       2,295  
Restricted cash     5,180       --  
Receivable for investments sold     8,128       5,713  
Interest receivable     44,449       51,990  
Dividends receivable     4,850       2,703  
Deferred financing costs     30,512       26,990  
Prepaid expenses and other assets     995       320  
    Total assets   $ 3,153,678     $ 2,944,312  
                 
Liabilities                
Debt   $ 1,125,491     $ 1,156,067  
Payable for investments purchased     101,559       26,021  
Dividends payable     44,948       40,578  
Management and performance-based incentive fees payable     29,167       26,509  
Interest payable     12,681       12,012  
Accrued administrative expenses     2,452       2,219  
Other liabilities and accrued expenses     4,212       3,517  
    Total liabilities   $ 1,320,510     $ 1,266,923  
                 
Net Assets                
Common stock, par value $.001 per share, 400,000 and 400,000 common shares authorized, respectively, and 224,741 and 202,891 issued and outstanding, respectively   $ 225     $ 203  
Paid-in capital in excess of par     3,115,537       2,933,636  
Over-distributed net investment income     (36,764 )     (44,183 )
Accumulated net realized loss     (1,149,014 )     (1,053,080 )
Net unrealized depreciation     (96,816 )     (159,187 )
    Total net assets   $ 1,833,168     $ 1,677,389  
    Total liabilities and net assets   $ 3,153,678     $ 2,944,312  
Net asset value per share   $ 8.16     $ 8.27  
                 
                 
                 
APOLLO INVESTMENT CORPORATION  
STATEMENTS OF OPERATIONS (unaudited)  
(in thousands, except per share amounts)  
             
    Three months ended  
    June 30,
2013
    June 30,
2012
 
INVESTMENT INCOME:                
From non-controlled/non-affiliated investments:                
  Interest   $ 75,561     $ 72,637  
  Dividends     4,264       1,006  
  Other income     4,476       4,044  
From non-controlled/affiliated investments:                
  Interest     440       --  
From controlled investments:                
  Interest     5,172       1,278  
  Dividends     6,722       1,368  
  Other income     38       --  
    Total investment income   $ 96,673     $ 80,333  
EXPENSES:                
  Management fees   $ 14,757     $ 13,820  
  Performance-based incentive fees     12,449       9,516  
  Interest and other debt expenses     15,845       15,577  
  Administrative services expense     1,097       750  
  Other general and administrative expenses     2,132       2,603  
    Total expenses     46,280       42,266  
  Management and performance-based incentive fees waived     (1,974 )     (665 )
    Net expenses     44,306       41,601  
      Net investment income   $ 52,367     $ 38,732  
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS, CASH EQUIVALENTS AND FOREIGN CURRENCIES:                
  Net realized loss:                
    Investments and cash equivalents   $ (97,910 )   $ (18,241 )
    Foreign currencies     1,976       (603 )
      Net realized loss     (95,934 )     (18,844 )
  Net change in unrealized depreciation/appreciation:                
    Investments and cash equivalents     57,194       (39,392 )
    Foreign currencies     (1,678 )     7,862  
    Derivatives     6,855       --  
      Net change in unrealized depreciation/appreciation     62,371       (31,530 )
  Net realized and unrealized gain (loss) from investments, cash equivalents and foreign currencies     (33,563 )     (50,374 )
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS   $ 18,804     $ (11,642 )
EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED   $ 0.09     $ (0.06 )
                 
                 
                 

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:
Contact

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

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