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ABDC: Q3 2018 Earnings and New Stock Buyback Authorization

By Lisa Thompson



Investors were pleased with Alcentra’s (ABDC) third quarter report wherein NAV increased slightly showing a stabilization of the portfolio. Management has been working toward that goal and has been turning over the portfolio, albeit slowly and cautiously to achieve that end. It still believes there are several quarters to go before it is where it needs to be. Equally as important as the repositioning, is the authorization of another $10 million to be used for stock buybacks. Given the large discount of the stock price to NAV, buying back stock is now a riskless way to provide return to shareholders

For the third quarter of 2018, the company reported total investment income of $6.6 million versus $7.6 million last year, a decline of 13%. Net investment income was $3.0 million, or $0.22 per share versus $4.8 million and $0.34 per share last year.

Of the 28 portfolio companies, there were two write-downs this quarter totally $2.0 million: Tunnel Hill Partners by $0.4 million, and another $1.6 million of XPRESS Global Systems (XGS). Two positions were written up totaling $2.7 million: SAFE by $0.2 million and NTI National Technologies by $2.5 million. Since June 30, 2018, nine positions were sold for proceeds of $34 million. The portfolio value increased to $249 million from $246 million in Q2 2018.

Net asset value (NAV) was $149.8 million, or $11.08 per share as of September 30, 2018 versus $11.01 per share, on June 30, 2018. During Q3 the company received proceeds from repayments, loan dispositions and amortizations on investments of $4.6 million and invested $6.1 million in two positions.

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