Apollo Investment Corporation Reports Financial Results for Quarter Ended September 30, 2012

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NEW YORK, NY--(Marketwire - Nov 8, 2012) - Apollo Investment Corporation (NASDAQ: AINV)

Recent Highlights:

  • Net investment income per share for the quarter ended September 30, 2012 was $0.22, compared to $0.201for the quarter ended June 30, 2012

  • Net asset value per share at September 30, 2012 was $8.46 compared to $8.30 at June 30, 2012

  • Declared a dividend of $0.20 per share for the third fiscal quarter of 2013

  • Net investment activity before repayments was $252 million for the quarter ended September 30, 2012

  • Issued $150 million of 6.625% 30-year senior unsecured notes in October 2012

Apollo Investment Corporation (NASDAQ: AINV) or the "Company," "Apollo Investment," "we," or "our" today announced financial results for its second fiscal quarter ended September 30, 2012. The Company's net investment income was $0.22 per share for the quarter ended September 30, 2012, and net asset value ("NAV") was $8.46 per share as of September 30, 2012.

Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the third fiscal quarter of 2013, payable on January 4, 2013 to stockholders of record as of December 18, 2012. 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, "We continued to reposition the portfolio during the quarter, as we were able to take advantage of the rally in the credit markets to sell select investments and invest in securities where we see good risk adjusted returns. We have been able to improve our security position without sacrificing credit risk and with minimal impact to our overall portfolio yield. Looking ahead, we believe that we are well positioned to take advantage of future market opportunities."

1 For the quarter ended June 30, 2012, excludes net $0.01 per share, in non-recurring expenses related to the refinancing of its revolving credit facility. 

 
 
FINANCIAL HIGHLIGHTS FOR THE QUARTER ENDED SEPTEMBER 30, 2012
 
Select Balance Sheet Data and Other Data
    September 30, 2012   March 31, 2012
Total assets   $ 2.79 billion   $ 2.78 billion
Investment portfolio   $ 2.68 billion   $ 2.68 billion
Net assets   $ 1.72 billion   $ 1.69 billion
Net asset value per share   $ 8.46   $ 8.55
Number of portfolio companies     69     62
 
Portfolio Activity
    Three months ended
September 30, 2012
  Six months ended
September 30, 2012
Investments made during the period   $ 395 million   $ 594 million
Number of new portfolio companies invested     12     22
             
Investments sold   $ (143) million   $ (312) million
Net activity before repaid investments   $ 252 million   $ 282 million
             
Investments repaid   $ (200) million   $ (286) million
Net investment activity   $ 52 million   $ (4) million
             
Number of portfolio company exits     8     15
   
Operating Results  
    Three months ended
September 30, 2012
  Six months ended
September 30, 2012*
 
Net investment income (in thousands)   $ 44,482   $ 84,283  
Net investment income per share   $ 0.22   $ 0.42  
Net realized and unrealized gain (loss) per share   $ 0.14   $ (0.11 )
Earnings per share - basic   $ 0.36   $ 0.31  
Earnings per share - diluted   $ 0.35   $ 0.31  
 
* Exclusive of non-recurring expenses related to refinancing of revolving credit facility. During the June quarter, the company recognized net $1.1 million, or $0.01 per share, in non-recurring expenses relating to the refinancing of its revolving credit facility.
 
 

CONFERENCE CALL / WEBCAST AT 10:00 AM EST ON NOVEMBER 8, 2012

The Company will host a conference call on Thursday, November 8, 2012 at 10:00 a.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 # 47486474 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 November 22, 2012 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 47486474. 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 September 30, 2012, we invested $395 million across 12 new and 11 existing portfolio companies, through a combination of primary and secondary market purchases. This compares to investing $403 million in 6 new and 8 existing portfolio companies for the three months ended September 30, 2011. Investments sold or prepaid during the three months ended September 30, 2012 totaled $343 million versus $387 million for the three months ended September 30, 2011.

At September 30, 2012, our portfolio consisted of 69 portfolio companies and was invested 37% in senior secured loans, 52% in subordinated debt, 1% in preferred equity and 10% in common equity and warrants measured at fair value versus 62 portfolio companies invested 30% in senior secured loans, 60% in subordinated debt, 1% in preferred equity and 9% in common equity and warrants measured at fair value at March 31, 2012.

The weighted average yields on our senior secured loan portfolio, subordinated debt portfolio and total debt portfolio as of September 30, 2012 at our current cost basis were 11.2%, 12.4% and 11.9%, respectively, exclusive of securities on non-accrual status. At September 30, 2011, the yields were 9.4%, 12.6% and 11.6%, respectively, exclusive of securities on non-accrual status.

Since the initial public offering of Apollo Investment in April 2004, and through September 30, 2012, invested capital totaled $9.4 billion in 188 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.

   
   
APOLLO INVESTMENT CORPORATION  
STATEMENTS OF ASSETS AND LIABILITIES  
(in thousands, except per share amounts)  
   
             
    September 30, 2012
(unaudited)
    March 31, 2012  
Assets                
Non-controlled/non-affiliated investments, at fair value (cost--$2,543,828 and $2,642,702, respectively)   $ 2,435,445     $ 2,490,672  
Controlled investments, at fair value (cost--$269,834 and $208,882, respectively)     240,644       186,408  
Cash     6,527       1,665  
Foreign currency (cost--$3,876 and $1,013, respectively)     3,882       1,013  
Receivable for investments sold     19,127       19,606  
Interest receivable     49,702       54,409  
Dividends receivable     4,207       2,898  
Deferred financing costs     23,696       16,401  
Prepaid expenses and other assets     1,875       2,191  
                 
  Total assets   $ 2,785,105     $ 2,775,263  
                 
Liabilities                
Debt   $ 934,720     $ 1,009,337  
Payable for investments and cash equivalents purchased     52,718       --  
Dividends payable     40,578       39,409  
Management and performance-based incentive fees payable     24,922       24,402  
Interest payable     10,934       10,102  
Accrued administrative expenses     1,336       3,420  
Other liabilities and accrued expenses     4,428       3,362  
                 
  Total liabilities   $ 1,069,636     $ 1,090,032  
                 
Net Assets                
Common stock, par value $.001 per share, 400,000 and 400,000 common shares authorized, respectively, and 202,891 and 197,043 issued and outstanding, respectively   $ 203     $ 197  
Paid-in capital in excess of par     2,936,321       2,886,327  
Over-distributed net investment income     (32,839 )     (34,896 )
Accumulated net realized loss     (1,054,832 )     (995,426 )
Net unrealized depreciation     (133,384 )     (170,971 )
                 
  Total net assets   $ 1,715,469     $ 1,685,231  
                 
  Total liabilities and net assets   $ 2,785,105     $ 2,775,263  
                 
Net asset value per share   $ 8.46     $ 8.55  
                 
                 
   
   
APOLLO INVESTMENT CORPORATION  
STATEMENTS OF OPERATIONS (unaudited)  
(in thousands, except per share amounts)  
   
    Three months ended     Six months ended  
    September 30, 2012     September 30, 2011     September 30, 2012     September 30, 2011  
INVESTMENT INCOME:                                
From non-controlled/non-affiliated investments:                                
  Interest   $ 70,275     $ 79,473     $ 142,912     $ 161,092  
  Dividends     1,012       1,090       2,018       4,285  
  Other income     4,455       5,965       8,498       13,240  
From non-controlled/affiliated investments:                                
  Interest     --       494       --       899  
From controlled investments:                                
  Interest     1,316       1,206       2,594       1,220  
  Dividends     6,774       5,753       8,142       7,837  
                                 
    Total investment income   $ 83,832     $ 93,981     $ 164,164     $ 188,573  
                                 
EXPENSES:                                
  Management fees   $ 13,464     $ 15,549     $ 26,890     $ 31,478  
  Performance-based incentive fees     10,627       11,383       19,872       19,764  
  Interest and other debt expenses     12,529       17,345       28,106       33,296  
  Administrative services expense     769       1,500       1,519       2,387  
  Other general and administrative expenses     1,961       2,672       4,564       8,454  
                                 
    Total expenses     39,350       48,449       80,951       95,379  
                                 
                                 
      Net investment income   $ 44,482     $ 45,532     $ 83,213     $ 93,194  
                                 
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS AND FOREIGN CURRENCIES:                                
  Net realized (loss) gain:                                
    Investments and cash equivalents   $ (40,773 )   $ (20,393 )   $ (59,014 )   $ (64,590 )
    Foreign currencies     211       208       (392 )     (1,543 )
                                 
      Net realized loss     (40,562 )     (20,185 )     (59,406 )     (66,133 )
                                 
  Net change in unrealized depreciation/appreciation:                                
    Investments and cash equivalents     76,274       (302,925 )     36,882       (305,469 )
    Foreign currencies     (7,158 )     10,328       705       11,214  
                                 
      Net change in unrealized depreciation/appreciation     69,116       (292,597 )     37,587       (294,255 )
                                 
  Net realized and unrealized gain (loss) from investments, cash equivalents and foreign currencies     28,554       (312,782 )     (21,819 )     (360,388 )
                                 
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS   $ 73,036     $ (267,250 )   $ 61,394     $ (267,194 )
                                 
EARNINGS (LOSS) PER SHARE - BASIC   $ 0.36     $ (1.36 )   $ 0.30     $ (1.36 )
                                 
EARNINGS (LOSS) PER SHARE - DILUTED   $ 0.35     $ (1.36 )   $ 0.30     $ (1.36 )
                                 
                                 

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 provides private debt market solutions to middle market companies in the form of senior secured, mezzanine and asset based loans and may also acquire equity interests. 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. 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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