- Portfolio expansion centered on debt investments drives
total investment income growth of 11% to $1.9 million for the
fourth quarter and 27% to $7.3 million for full year 2023
- Rand’s portfolio was comprised of 64% interest yielding debt
instruments at year-end compared with 56% at the end of 2022, which
improved the portfolio yield and net interest income
- Paid total dividends of $1.33 per share in 2023, up 60% from
2022
- Net asset value per share (“NAV”) was $23.56 at December 31,
2023, up 5% from year-end 2022
- $2.3 million in follow on investments during the fourth
quarter; Full year 2023 investments totaled $20.3 million
Rand Capital Corporation (Nasdaq: RAND) (“Rand” or the
“Company”), a business development company providing alternative
financing for lower middle market companies, announced its results
for the fourth quarter and full year ended December 31, 2023.
Daniel P. Penberthy, President and Chief Executive Officer of
Rand, commented, “We delivered another strong year of results as we
continued to scale the business through the successful execution of
our strategy. We put more than $20 million to work during 2023,
primarily in income producing investments which drove higher
investment income that enabled us to increase our return to
shareholders during the year. In total, dividends increased 60% to
$1.33 per share in 2023, which included an increase of our regular
quarterly dividend earlier in the year and a special dividend paid
out during the fourth quarter.
“We entered 2024 with a strong and flexible balance sheet that
is supported by multiple sources of capital. We have a solid
pipeline of investment opportunities and believe we can continue to
execute our strategy by increasing our portfolio composition with
new debt investments.”
Fourth Quarter Highlights (compared with the prior-year
period unless otherwise noted)
- Total investment income grew $197,000, or 11%, to $1.9 million,
which reflected a 47% increase in interest from portfolio
companies, partially offset by lower dividend income. The decrease
in dividend income was largely due to a large prior-year dividend
from a portfolio company, which did not occur, and the sale of the
Company’s investment in Dealer Solutions and Design (DSD) during
the second quarter of 2023.
- Total expenses were $1.0 million compared with $371,000 in the
prior-year fourth quarter. The change reflects a $293,000 increase
in interest expense on borrowings under the senior revolving credit
facility, along with a change in accrued capital gains incentive
fees to the Company’s external investment adviser. The current
period included an expense of $64,000 in capital gains incentive
fees compared with a credit of $168,000 for the fourth quarter of
2022.
- Adjusted expenses, which exclude capital gains incentive fees
and is a non-GAAP financial measure, were $950,000 compared with
$539,000 in the fourth quarter of 2022. See the attached
description of this non-GAAP financial measure and reconciliation
table for adjusted expenses.
- Net investment income was $962,000, or $0.37 per share,
compared with $1.2 million, or $0.48 per share, in the fourth
quarter of 2022. Adjusted net investment income per share, a
non-GAAP financial measure, which excludes the capital gains
incentive fee accrual expense, was $0.40 per share compared with
$0.41 in last year’s fourth quarter. See the attached description
of this non-GAAP financial measure and reconciliation table for
adjusted net investment income per share.
2023 Highlights
- Total investment income of $7.3 million increased $1.6 million,
or 27%, from the prior year.
- Total expenses were $4.2 million compared with $1.1 million in
the prior year. The increase reflected $805,000 of accrued capital
gains incentive fees during 2023 compared with a $1.0 million
reduction of accrued fees during 2022. Rand entered into a senior
revolving credit facility in June 2022 to drive growth. As a
result, interest expense increased $975,000 in 2023 compared with
the prior year.
- Excluding the capital gains incentive fee accrual, adjusted
expenses, which is a non-GAAP financial measure, increased $1.2
million to $3.4 million in 2023. See the attached description of
this non-GAAP financial measure and reconciliation table for
adjusted expenses.
- Net investment income per share was $1.15 for 2023 compared
with $1.72 per share in the prior year. Excluding the capital gains
incentive fee accrual, adjusted net investment income per share for
2023 was $1.46, up 11%, from $1.31 in 2022. See the attached
description of this non-GAAP financial measure and reconciliation
table for adjusted net investment income per share.
- Net assets at December 31, 2023 were $60.8 million, up 5% from
year-end 2022.
Portfolio and Investment Activity
As of December 31, 2023, Rand’s portfolio included investments
with a fair value of $77.1 million across 30 portfolio businesses.
This was up $15.6 million, or 25%, from December 31, 2022, and
reflected new and follow on investments and valuation adjustments
in multiple portfolio companies. This was partially offset by
equity sales and loan repayments. At December 31, 2023, the
portfolio was comprised of approximately 64% in debt investments,
27% in equity investments in private companies, and 9% in publicly
traded equities consisting of other BDCs and ACV Auctions. The
annualized weighted average yield of debt investments, which
includes PIK interest, was 13.6% compared with 12.6% at the end of
2022.
Fourth quarter 2023:
- Funded a follow-on debt investment of $2.2 million to BMP Food
Service Supply Holdco, LLC (FSS). Subsequently FSS made a loan
principal payment of $0.6 million during the quarter. Rand’s total
debt and equity investment in FSS had a fair value of $7.4 million
at year-end.
- Follow-on equity investment of $73,000 to Caitec, Inc.
Full year 2023:
- Invested a total of $20.3 million across nine transactions,
which largely consisted of interest yielding assets.
- Portfolio investment company DSD was sold during the second
quarter of 2023, which resulted in the full repayment of Rand’s
subordinated debt and sale of its preferred equity investments. In
total, Rand received $6.7 million of proceeds, which included a net
gain of $2.5 million.
- Sold ACV Auctions public securities for $1.7 million in
gains.
Liquidity and Capital Resources
Cash at year-end was $3.3 million, which reflected the proceeds
received from exiting DSD and ACV Auctions share sales in the
second quarter of 2023. As of December 31, 2023, the Company held
shares valued at approximately $4.4 million in other publicly
traded BDCs and $3.0 million in ACV Auctions, all of which are
available for future liquidity needs including dividends and
portfolio investments.
At December 31, 2023, Rand had outstanding borrowings of $16.3
million on its existing $25.0 million senior secured revolving
credit facility. The outstanding borrowings carried an interest
rate of 8.9% at year-end.
The Company did not repurchase any outstanding common stock
during 2023.
Dividends
On December 5, 2023, the Board declared an aggregate of $0.63
per share cash dividend distribution, which was paid during the
fourth quarter, to shareholders of record as of December 18, 2023.
The dividend consisted of a regular quarterly dividend of $0.25 per
share and a special dividend of $0.38 per share.
During 2023, Rand paid a total of $3.4 million in dividends,
which included the four regular quarterly dividends, and the
year-end 2023 special dividend.
On February 26, 2024, Rand declared its regular quarterly cash
dividend distribution of $0.25 per share. The cash dividend will be
distributed on or about March 29, 2024, to shareholders of record
as of March 13, 2024.
Webcast and Conference Call
Rand will host a conference call and webcast on Tuesday, March
5, 2024, at 1:30 p.m. Eastern Time, to review its financial
results. The review will be accompanied by a slide presentation,
which will be available on Rand’s website at www.randcapital.com in
the “Investor Relations” section. Rand’s conference call can be
accessed by calling (201) 689-8263. Alternatively, the webcast can
be monitored on Rand’s website at www.randcapital.com under
“Investor Relations” where the replay will also be available.
A telephonic replay will be available from 5:30 p.m. ET on the
day of the call through Tuesday, March 19, 2024. To listen to the
archived call, dial (412) 317-6671 and enter replay pin number
13743458. A transcript of the call will also be posted once
available.
ABOUT RAND CAPITAL
Rand Capital (Nasdaq: RAND) is an externally managed business
development company (BDC). The Company’s investment objective is to
maximize total return to its shareholders with current income and
capital appreciation by focusing its debt and related equity
investments in privately-held, lower middle market companies with
committed and experienced managements in a broad variety of
industries. Rand invests in businesses that have sustainable,
differentiated and market-proven products, revenue of more than $10
million and EBITDA in excess of $1.5 million. The Company’s
investment activities are managed by its external investment
adviser, Rand Capital Management, LLC. Additional information can
be found at the Company’s website where it regularly posts
information: https://www.randcapital.com/.
Safe Harbor Statement
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than historical facts, including but
not limited to statements regarding the strategy of the Company and
its outlook; statements regarding the implementation of the
Company’s strategy, its ability to continue to increase the number
and aggregate size of its debt investments and its growth
trajectory; and any assumptions underlying any of the foregoing,
are forward-looking statements. Forward-looking statements concern
future circumstances and results and other statements that are not
historical facts and are sometimes identified by the words “may,”
“will,” “should,” “potential,” “intend,” “expect,” “endeavor,”
“seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,”
“believe,” “could,” “project,” “predict,” “continue,” “target” or
other similar words or expressions. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove to be incorrect, actual results may vary
materially from those indicated or anticipated by such
forward-looking statements. The inclusion of such statements should
not be regarded as a representation that such plans, estimates or
expectations will be achieved. Important factors that could cause
actual results to differ materially from such plans, estimates or
expectations include, among others, (1) evolving legal, regulatory
and tax regimes; (2) changes in general economic and/or industry
specific conditions; and (3) other risk factors as detailed from
time to time in Rand ’s reports filed with the Securities and
Exchange Commission (“SEC”), including Rand’s annual report on Form
10-K for the year ended December 31, 2023, quarterly reports on
Form 10-Q, and other documents filed with the SEC. Consequently,
such forward-looking statements should be regarded as Rand’s
current plans, estimates and beliefs. Except as required by
applicable law, Rand assumes no obligation to update the
forward-looking information contained in this release.
FINANCIAL TABLES FOLLOW
Rand Capital Corporation and
Subsidiaries
Consolidated Statements of
Financial Position
(Audited)
2023
2022
ASSETS
Investments at fair value:
Control investments (cost of $5,272,770
and $4,660,017, respectively)
$
4,148,960
$
3,536,207
Affiliate investments (cost of $45,720,974
and $30,204,160, respectively)
53,499,372
38,241,589
Non-Control/Non-Affiliate investments
(cost of $17,371,862 and $20,852,060, respectively)
19,477,380
19,726,463
Total investments, at fair value (cost of
$68,365,606 and $55,716,237, respectively)
77,125,712
61,504,259
Cash
3,295,321
1,368,996
Interest receivable
244,600
208,338
Prepaid income taxes
127,869
76,396
Deferred tax asset, net
39,179
28,160
Other assets
189,301
295,043
Total assets
$
81,021,982
$
63,481,192
LIABILITIES AND
STOCKHOLDERS’ EQUITY (NET ASSETS)
Liabilities:
Due to investment adviser
$
979,297
$
562,221
Accounts payable and accrued expenses
145,516
66,680
Line of credit
16,250,000
2,550,000
Capital gains incentive fees
2,279,700
2,167,000
Deferred revenue
552,256
413,971
Total liabilities
20,206,769
5,759,872
Stockholders’ equity (net
assets):
Common stock, $0.10 par; shares authorized
100,000,000; shares issued: 2,648,916; shares outstanding:
2,581,021 at 12/31/23 and 12/31/22
264,892
264,892
Capital in excess of par value
55,801,170
51,464,267
Treasury stock, at cost: 67,895 shares at
12/31/23 and 12/31/22
(1,566,605
)
(1,566,605
)
Total distributable earnings
6,315,756
7,558,766
Total stockholders’ equity (net assets)
(per share - 2023: $23.56, 2022: $22.36)
60,815,213
57,721,320
Total liabilities and stockholders’
equity (net assets)
$
81,021,982
$
63,481,192
Rand Capital Corporation and
Subsidiaries
Consolidated Statements of
Operations
(Unaudited) (Audited)
For the Quarter Ended December
31,
For the Year Ended December
31,
2023
2022
2023
2022
Investment income: Interest from
portfolio companies: Control
investments
$
192,072
$
154,647
$
698,872
$
279,055
Affiliate investments
1,127,121
599,931
3,858,696
2,366,955
Non-Control/Non-Affiliate investments
354,042
381,248
1,421,787
1,506,792
Total interest from portfolio companies
1,673,235
1,135,826
5,979,355
4,152,802
Interest from other investments:
Non-Control/Non-Affiliate investments
241
82
933
131
Total interest from other investments
241
82
933
131
Dividend and other investment
income: Affiliate investments
86,125
422,200
506,076
974,669
Non-Control/Non-Affiliate investments
129,250
122,965
531,055
481,665
Total dividend and other investment income
215,375
545,165
1,037,131
1,456,334
Fee income:
Control investments
4,516
3,900
17,242
7,800
Affiliate investments
31,245
20,371
278,061
92,531
Non-Control/Non-Affiliate investments
5,507
27,642
25,441
55,583
Total fee income
41,268
51,913
320,744
155,914
Total investment income
1,930,119
1,732,986
7,338,163
5,765,181
Expenses:
Base management fee
287,297
230,454
1,057,166
927,226
Capital gains incentive fees
64,000
(168,000
)
804,700
(1,048,760
)
Interest expense
336,997
43,918
1,044,831
69,960
Professional fees
155,346
160,657
547,456
729,967
Directors' fees
65,709
50,050
263,500
187,833
Stockholders and office operating
55,158
41,756
261,639
205,083
Administrative fees
37,250
-
149,000
-
Insurance
10,380
11,238
44,100
43,026
Corporate development
1,660
-
5,927
3,753
Other operating
-
1,017
-
1,141
Total expenses
1,013,797
371,090
4,178,319
1,119,229
Net investment income before income taxes
916,322
1,361,896
3,159,844
4,645,952
Income tax (benefit) expense, including excise tax expense
(45,282
)
131,792
192,111
215,542
Net investment income
961,604
1,230,104
2,967,733
4,430,410
Net realized (loss) gain on
sales and dispositions of investments:
Affiliate investments
(21,265
)
-
2,574,829
167,159
Non-Control/Non-Affiliate investments
3,440
14,902
(1,523,750
)
538,334
Net realized (loss) gain on sales and dispositions, before income
taxes
(17,825
)
14,902
1,051,079
705,493
Income tax expense
21,524
-
359,682
-
Net realized (loss) gain on sales and dispositions of investments
(39,349
)
14,902
691,397
705,493
Net change in unrealized
appreciation/depreciation on investments:
Control investments
-
(748,810
)
-
(748,810
)
Affiliate investments
627,667
4,692,512
(259,031
)
4,740,353
Non-Control/Non-Affiliate investments
(289,938
)
(4,760,553
)
3,231,115
(9,901,315
)
Change in unrealized appreciation/depreciation before income taxes
337,729
(816,851
)
2,972,084
(5,909,772
)
Deferred income tax expense
171,005
107,980
104,564
107,980
Net change in unrealized appreciation/depreciation on investments
166,724
(924,831
)
2,867,520
(6,017,752
)
Net realized and unrealized
gain (loss) on investments
127,375
(909,929
)
3,558,917
(5,312,259
)
Net increase (decrease) in net assets from operations
$
1,088,979
$
320,175
$
6,526,650
$
(881,849
)
Weighted average shares outstanding
2,581,021
2,581,021
2,581,021
2,581,021
Basic and diluted net increase (decrease) in net assets from
operations per share
$
0.42
$
0.12
$
2.53
$
(0.34
)
Rand Capital Corporation and
Subsidiaries
Consolidated Statements of
Changes in Net Assets
(Audited)
2023
2022
Net assets at beginning of year
$
57,721,320
$
60,745,416
Net investment income
2,967,733
4,430,410
Net realized gain on sales and
dispositions of investments
691,397
705,493
Net change in unrealized
appreciation/depreciation on investments
2,867,520
(6,017,752
)
Net increase (decrease) in net assets from
operations
6,526,650
(881,849
)
Declaration of dividends
(3,432,757
)
(2,142,247
)
Net assets at end of year
$
60,815,213
$
57,721,320
Rand Capital Corporation and
Subsidiaries Reconciliation of GAAP Total Expense to
Non-GAAP Adjusted Expenses (Unaudited)
In addition to reporting total expenses, which is a U.S.
generally accepted accounting principle (“GAAP”) financial measure,
Rand presents adjusted expenses, which is a non-GAAP financial
measure. Adjusted expenses is defined as GAAP total expenses
removing the effect of any expenses/(credits) for capital gains
incentive fees accrual. GAAP total expenses is the most directly
comparable GAAP financial measure. Rand believes that adjusted
expenses provides useful information to investors regarding
financial performance because it is a method the Company uses to
measure its financial and business trends related to its results of
operations. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for
financial results prepared in accordance with GAAP.
Three months ended
December 31, 2023
Three months ended
December 31, 2022
Year ended December 31,
2023
Year ended December 31,
2022
Total expenses
$
1,013,797
$
371,090
$
4,178,319
$
1,119,229
Exclude expenses/(credits) for capital
gains incentive fees
64,000
(168,000
)
804,700
(1,048,760
)
Adjusted total expenses
$
949,797
$
539,090
$
3,373,619
$
2,167,989
Reconciliation of GAAP Net Investment Income
per Share to Adjusted Net Investment Income per Share
(Unaudited)
In addition to reporting Net Investment Income per Share, which
is a GAAP financial measure, the Company presents Adjusted Net
Investment Income per Share, which is a non-GAAP financial measure.
Adjusted Net Investment Income per Share is defined as GAAP Net
Investment Income per Share removing the effect of any
expenses/(credits) for capital gains incentive fees. GAAP Net
Investment Income per Share is the most directly comparable GAAP
financial measure. Rand believes that Adjusted Net Investment
Income per Share provides useful information to investors regarding
financial performance because it is a method the Company uses to
measure its financial and business trends related to its results of
operations. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for
financial results prepared in accordance with GAAP.
Three months ended
December 31, 2023
Three months ended
December 31, 2022
Year ended December 31,
2023
Year ended December 31,
2022
Net investment income per share
$
0.37
$
0.48
$
1.15
$
1.72
Exclude expenses/(credits) for capital
gains incentive fees per share
0.02
(0.07
)
0.31
(0.41
)
Adjusted net investment income per
share
$
0.40
$
0.41
$
1.46
$
1.31
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240305723250/en/
Company: Daniel P. Penberthy President and CEO
716.853.0802 dpenberthy@randcapital.com
Investors: Deborah K. Pawlowski / Craig P. Mychajluk Kei
Advisors LLC 716-843-3908 / 716-843-3832 dpawlowski@keiadvisors.com
/ cmychajluk@keiadvisors.com
Rand Capital (NASDAQ:RAND)
過去 株価チャート
から 12 2024 まで 1 2025
Rand Capital (NASDAQ:RAND)
過去 株価チャート
から 1 2024 まで 1 2025
