Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the
“Company”), a leading provider of flexible capital solutions to
late- and growth-stage companies seeking an alternative to raising
equity, today announced its financial results for the fourth
quarter and fiscal year ended December 31, 2023.
Fourth Quarter 2023
Highlights
- Total investment income of $39.2
million
- Net investment income of $18.3
million, or $0.45 per share
- Net asset value of $13.50 per
share
- Dollar-weighted annualized yield on
debt investments of 16.9% for the quarter
- Eight investments completed in new
and existing portfolio companies, representing $154.6 million in
funded loans and other investments
- Aggregate proceeds of $63.4 million
received from principal prepayments
2023 Fiscal Year Highlights
- Total investment
portfolio at year-end 2023 of $1.0 billion at fair value, excluding
US Treasury Bills
- Net investment
income of $78.3 million, or $1.93 per share
- Net asset value
(“NAV”) at 12/31/2023 of $547.1 million, or $13.50 per share
- Total investment
fundings of $259.2 million: $83.5 million in four new portfolio
companies and $175.7 million in 14 existing portfolio
companies
- Low credit loss
ratio of an average 14 basis points per year on a gross basis and
an average 11 basis points per year on a net (debt and equity)
basis, based on cumulative commitments since inception
First Quarter 2024
Distributions
- Declared first
quarter 2024 regular dividend of $0.40 per share
- Declared first
quarter 2024 supplemental dividend of $0.07 per share
“In 2023, Runway Growth drove shareholder return while taking a
measured approach to portfolio management as we preserved
industry-leading credit quality,” said Greg Greifeld, Acting Chief
Executive Officer of Runway Growth, and Deputy Chief Investment
Officer and Head of Credit of Runway Growth Capital. “Over the
course of the year, Runway Growth expanded its return on equity by
33 basis points and ended the fourth quarter with eight investments
in new and existing portfolio companies.”
Greifeld continued, “We are proud of our team’s thoughtful due
diligence, consistent partnership with borrowers, and the momentum
we delivered to end the year. We have applied a critical lens to
evaluating our pipeline of opportunities, and are in a position to
originate attractive investments that meet our high credit bar in
the year ahead. Runway Growth is committed to generating
shareholder value, which is reinforced by our strong and consistent
base dividend and ongoing supplemental distributions.”
Fourth Quarter 2023 Operating
Results
Total investment income for the quarter ended December 31, 2023
was $39.2 million, compared to $36.5 million for the quarter ended
December 31, 2022.
Net investment income for the quarter ended December 31, 2023
was $18.3 million, or $0.45 per share, compared to $18.4 million,
or $0.45 per share, for the quarter ended December 21, 2022.
The Company's dollar-weighted annualized yield on average debt
investments for the quarter ended December 31, 2023, was 16.9%. The
Company calculates the yield on dollar-weighted debt investments
for any period measured as (1) total investment-related income
during the period divided by (2) the daily average of the fair
value of debt investments outstanding during the period.
Total operating expenses for the quarter ended December 31, 2023
were $20.9 million, compared to $18.1 million for the quarter ended
December 31, 2022. The increase was driven by higher interest rates
and increased financing expenses on borrowings.
Net realized loss on investments was $17.2 million for the
quarter ended December 31, 2023, compared to a net realized loss of
$2.0 million for the quarter ended December 31, 2022.
For the quarter ended December 31, 2023, net change in
unrealized loss on investments was $5.9 million, compared to a net
change in unrealized gain of $2.1 million for the comparable prior
year period.
Portfolio and Investment
Activity
As of December 31, 2023, Runway Growth’s investment portfolio
had an aggregate fair value of approximately $1.0 billion and was
comprised of approximately $978.5 million in term loans, 98.5% of
which are senior secured loans and $46.5 million in warrants and
other equity-related investments in 52 portfolio companies.
During the fourth quarter of 2023, Runway Growth completed eight
investments in new and existing portfolio companies, representing
$154.6 million in funded loans.
Total portfolio investment activity for the three and twelve
months ended December 31, 2023, and 2022 was as follows:
|
Three Months Ended December 31, |
|
|
Years Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Beginning investment portfolio |
$ |
1,010,927 |
|
|
$ |
910,169 |
|
|
$ |
1,126,309 |
|
|
$ |
729,516 |
|
Purchases of investments |
|
94,937 |
|
|
|
229,899 |
|
|
|
200,464 |
|
|
|
622,719 |
|
Purchases of U.S. Treasury
Bills |
|
41,999 |
|
|
|
— |
|
|
|
76,973 |
|
|
|
— |
|
PIK interest |
|
4,590 |
|
|
|
2,310 |
|
|
|
19,924 |
|
|
|
8,655 |
|
Sales and prepayments of
investments |
|
(63,407 |
) |
|
|
(16,000 |
) |
|
|
(289,078 |
) |
|
|
(159,144 |
) |
Scheduled repayments of
investments |
|
(285 |
) |
|
|
(2,488 |
) |
|
|
(7,331 |
) |
|
|
(9,754 |
) |
Sales and maturities of U.S.
Treasury Bills |
|
— |
|
|
|
— |
|
|
|
(35,000 |
) |
|
|
(45,000 |
) |
Amortization of fixed income
premiums or accretion of discounts |
|
1,350 |
|
|
|
2,287 |
|
|
|
8,682 |
|
|
|
6,863 |
|
Net realized gain (loss) on
investments |
|
(17,209 |
) |
|
|
(2,000 |
) |
|
|
(18,387 |
) |
|
|
(1,061 |
) |
Net change in unrealized gain
(loss) on investments |
|
(5,893 |
) |
|
|
2,132 |
|
|
|
(15,547 |
) |
|
|
(26,485 |
) |
Ending investment
portfolio |
$ |
1,067,009 |
|
|
$ |
1,126,309 |
|
|
$ |
1,067,009 |
|
|
$ |
1,126,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value
As of December 31, 2023, net asset value (“NAV’”) per share was
$13.50, compared to $14.22 as of December 31, 2022. Total net
assets at the end of the quarter of 2023 was $547.1 million, down
5.0% from $576.1 million in the prior year period.
For the quarter ended December 31, 2023, net decrease in net
assets resulting from operations was $4.8 million,
or $0.12 per share, compared to a net increase in net assets
of $18.5 million, or $0.46 per share, for the quarter
ended December 31, 2022.
Liquidity and Capital
Resources
As of December 31, 2023, the Company had approximately $281.0
million in available liquidity, including unrestricted cash and
cash equivalents of $3.0 million and $278.0 million in available
borrowing capacity under the Company’s credit facility, subject to
existing terms, advance rates and regulatory and covenant
requirements.
The Company ended the quarter with a core leverage ratio of
approximately 95%, compared to 79% for the quarter ended September
30, 2023.
Distributions
On February 1, 2024, the Company’s board of directors declared a
regular quarterly distribution of $0.40 per share for the first
quarter of 2024, payable on February 28, 2024, to stockholders of
record as of February 12, 2024. In addition, the Company’s board of
directors declared a supplemental dividend of $0.07 per share for
the first quarter of 2024 that is also payable on February 28,
2024, to stockholders of record as of February 12, 2024.
Share Repurchase Program
On November 2, 2023, the Company’s board of directors approved a
share repurchase program (the “Share Repurchase Program”) under
which the Company may repurchase up to $25.0 million of its
outstanding common stock. Under the Share Repurchase Program,
purchases may be made at management’s discretion from time to time
in open-market transactions, in accordance with applicable
securities laws and regulations.
Recent Developments
The Company evaluated events subsequent to December 31, 2023
through March 7, 2024, the date the consolidated financial
statements were issued.
Effective January 1, 2024, the Company placed one loan to Mingle
Healthcare Solutions, Inc. on non-accrual status, representing an
outstanding principal of $4.3 million at a fair market value of
$3.8 million as of December 31, 2023. The loan comprised 0.37% of
the total fair value of the Company's investment portfolio,
excluding U.S. Treasury Bills, as of December 31, 2023.
On February 14, 2024, the Company received a partial prepayment
of $7.1 million from MarleySpoon SE on its senior secured loan.
On March 7, 2024, the Company and Cadma Capital Partners LLC
entered into a Limited Liability Company Agreement to co-manage
Runway-Cadma I LLC (the "Joint Venture"). The Joint Venture is
expected to invest in various types of investments, including, but
not limited to, first and second lien senior secured term loans,
including delayed draw and multi-tranche loans, and secured
revolving credit facilities.
Conference Call
Runway Growth will hold a conference call to discuss its fourth
quarter and fiscal year ended December 31, 2023, financial results
at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, March 7, 2024. To
participate in the conference call or webcast, participants should
register online at the Runway Investor Relations website. The
earnings call can also be accessed through the following links:
A live webcast will be available in the investor section of the
Company’s website, and will be archived for 90 days following the
call.
About Runway Growth Finance
Corp.
Runway Growth is a growing specialty finance company focused on
providing flexible capital solutions to late- and growth-stage
companies seeking an alternative to raising equity. Runway Growth
is a closed-end investment fund that has elected to be regulated as
a business development company under the Investment Company Act of
1940. Runway Growth is externally managed by Runway Growth Capital
LLC, an established registered investment advisor that was formed
in 2015 and led by industry veteran David Spreng. For more
information, please visit www.runwaygrowth.com.
Forward-Looking Statements
Statements included herein may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Statements other than statements of historical
facts included in this press release may constitute forward-looking
statements and are not guarantees of future performance, condition
or results and involve a number of risks and uncertainties. Actual
results may differ materially from those in the forward-looking
statements as a result of a number of factors, including those
described from time to time in Runway Growth’s filings with the
Securities and Exchange Commission. Runway Growth undertakes no
duty to update any forward-looking statement made herein. All
forward-looking statements speak only as of the date of this press
release.
Important Disclosures
Strategies described involve special risks that should be
evaluated carefully before a decision is made to invest. Not all of
the risks and other significant aspects of these strategies are
discussed herein. Please see a more detailed discussion of
these risk factors and other related risks in the Company’s most
recent annual Form 10-K report in the section entitled “Risk
Factors”, which may be obtained on the Company’s website,
www.runwaygrowth.com, or the SEC’s website, www.sec.gov.
IR Contacts:
Stefan Norbom, Prosek Partners, snorbom@prosek.com
Thomas B. Raterman, Acting President, Chief Financial Officer
and Chief Operating Officer, tr@runwaygrowth.com
RUNWAY GROWTH FINANCE CORP.Consolidated
Statements of Assets and Liabilities(In thousands,
except share and per share data) |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
|
|
Investments at fair
value: |
|
|
|
|
|
|
|
Non-control/non-affiliate investments at fair value (cost of
$1,005,024 and $1,126,879, respectively) |
$ |
972,604 |
|
|
$ |
1,114,935 |
|
Affiliate investments at fair value (cost of $58,861 and $4,551,
respectively) |
|
51,456 |
|
|
|
2,084 |
|
Control investments at fair value (cost of $950 and $19,172,
respectively) |
|
950 |
|
|
|
9,290 |
|
Investment in U.S. Treasury Bills at fair value (cost of $42,014
and $0, respectively) |
|
41,999 |
|
|
|
— |
|
Total investments at fair value (cost of $1,106,849 and $1,150,602,
respectively) |
|
1,067,009 |
|
|
|
1,126,309 |
|
Cash and cash equivalents |
|
2,970 |
|
|
|
5,761 |
|
Interest and fees
receivable |
|
8,269 |
|
|
|
8,766 |
|
Other assets |
|
905 |
|
|
|
930 |
|
Total assets |
|
1,079,153 |
|
|
|
1,141,766 |
|
Liabilities |
|
|
|
|
|
|
|
Debt: |
|
|
|
|
|
|
|
Credit facility |
|
272,000 |
|
|
|
337,000 |
|
2026 Notes |
|
95,000 |
|
|
|
70,000 |
|
2027 Notes |
|
152,250 |
|
|
|
152,250 |
|
Unamortized deferred debt costs |
|
(9,172 |
) |
|
|
(10,293 |
) |
Total debt, less unamortized deferred debt costs |
|
510,078 |
|
|
|
548,957 |
|
Incentive fees payable |
|
12,500 |
|
|
|
8,808 |
|
Interest payable |
|
6,764 |
|
|
|
6,221 |
|
Accrued expenses and other
liabilities |
|
2,740 |
|
|
|
1,728 |
|
Total liabilities |
|
532,082 |
|
|
|
565,714 |
|
Net
assets |
|
|
|
|
|
|
|
Common stock, par value |
|
414 |
|
|
|
414 |
|
Additional paid-in capital |
|
605,110 |
|
|
|
605,774 |
|
Distributable earnings (losses) |
|
(47,637 |
) |
|
|
(19,320 |
) |
Treasury stock |
|
(10,816 |
) |
|
|
(10,816 |
) |
Total net assets |
$ |
547,071 |
|
|
$ |
576,052 |
|
|
|
|
|
|
|
|
|
Shares of common stock
outstanding ($0.01 par value, 100,000,000 shares authorized) |
|
40,509,269 |
|
|
|
40,509,269 |
|
Net asset value per share |
$ |
13.50 |
|
|
$ |
14.22 |
|
|
|
|
|
|
|
|
|
RUNWAY GROWTH FINANCE CORP.Consolidated
Statements of Operations(In thousands, except
share and per share data) |
|
|
Three Months Ended December 31, |
|
|
Years Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From non-control/non-affiliate
investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
32,743 |
|
|
$ |
33,515 |
|
|
$ |
136,912 |
|
|
$ |
95,264 |
|
Payment-in-kind interest income |
|
4,667 |
|
|
|
2,310 |
|
|
|
20,083 |
|
|
|
5,558 |
|
Dividend income |
|
318 |
|
|
|
318 |
|
|
|
1,279 |
|
|
|
1,338 |
|
Fee income |
|
757 |
|
|
|
315 |
|
|
|
3,342 |
|
|
|
1,383 |
|
From affiliate
investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
604 |
|
|
|
— |
|
|
|
2,090 |
|
|
|
5 |
|
Payment-in-kind interest income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
96 |
|
Fee income |
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
8 |
|
From control investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,112 |
|
Payment-in-kind interest income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,985 |
|
Other income |
|
136 |
|
|
|
— |
|
|
|
488 |
|
|
|
2 |
|
Total investment income |
|
39,225 |
|
|
|
36,458 |
|
|
|
164,209 |
|
|
|
107,751 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees |
|
4,113 |
|
|
|
3,394 |
|
|
|
16,711 |
|
|
|
11,882 |
|
Incentive fees |
|
4,052 |
|
|
|
4,592 |
|
|
|
19,046 |
|
|
|
13,183 |
|
Interest and other debt
financing expenses |
|
10,371 |
|
|
|
8,464 |
|
|
|
43,143 |
|
|
|
16,761 |
|
Professional fees |
|
846 |
|
|
|
456 |
|
|
|
2,350 |
|
|
|
2,133 |
|
Administration agreement
expenses |
|
478 |
|
|
|
507 |
|
|
|
2,125 |
|
|
|
1,838 |
|
Insurance expense |
|
223 |
|
|
|
210 |
|
|
|
1,028 |
|
|
|
1,016 |
|
Tax expense |
|
614 |
|
|
|
290 |
|
|
|
664 |
|
|
|
291 |
|
Other expenses |
|
211 |
|
|
|
185 |
|
|
|
867 |
|
|
|
851 |
|
Total operating expenses |
|
20,908 |
|
|
|
18,098 |
|
|
|
85,934 |
|
|
|
47,955 |
|
Net investment
income |
|
18,317 |
|
|
|
18,360 |
|
|
|
78,275 |
|
|
|
59,796 |
|
Net realized and net
change in unrealized gain (loss) on investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) on
non-control/non-affiliate investments, including U.S. Treasury
Bills |
|
(196 |
) |
|
|
— |
|
|
|
(1,374 |
) |
|
|
939 |
|
Net realized gain (loss) on
control investments |
|
(17,013 |
) |
|
|
(2,000 |
) |
|
|
(17,013 |
) |
|
|
(2,000 |
) |
Net realized gain (loss) on investments, including U.S. Treasury
Bills |
|
(17,209 |
) |
|
|
(2,000 |
) |
|
|
(18,387 |
) |
|
|
(1,061 |
) |
Net change in unrealized gain
(loss) on non-control/non-affiliate investments, including U.S.
Treasury Bills |
|
(12,984 |
) |
|
|
(4,594 |
) |
|
|
(20,491 |
) |
|
|
(18,870 |
) |
Net change in unrealized gain
(loss) on affiliate investments |
|
741 |
|
|
|
(97 |
) |
|
|
(4,938 |
) |
|
|
(3,476 |
) |
Net change in unrealized gain
(loss) on control investments |
|
6,350 |
|
|
|
6,823 |
|
|
|
9,882 |
|
|
|
(4,139 |
) |
Net change in unrealized gain (loss) on investments, including U.S.
Treasury Bills |
|
(5,893 |
) |
|
|
2,132 |
|
|
|
(15,547 |
) |
|
|
(26,485 |
) |
Net realized and
unrealized gain (loss) on investments |
|
(23,102 |
) |
|
|
132 |
|
|
|
(33,934 |
) |
|
|
(27,546 |
) |
Net increase
(decrease) in net assets resulting from operations |
$ |
(4,785 |
) |
|
$ |
18,492 |
|
|
$ |
44,341 |
|
|
$ |
32,250 |
|
Net investment income per
common share (basic and diluted) |
$ |
0.45 |
|
|
$ |
0.45 |
|
|
$ |
1.93 |
|
|
$ |
1.46 |
|
Net increase (decrease) in net
assets resulting from operations per common share (basic and
diluted) |
$ |
(0.12 |
) |
|
$ |
0.46 |
|
|
$ |
1.09 |
|
|
$ |
0.79 |
|
Weighted average shares
outstanding (basic and diluted) |
|
40,509,269 |
|
|
|
40,531,403 |
|
|
|
40,509,269 |
|
|
|
40,971,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Runway Growth Finance (NASDAQ:RWAY)
過去 株価チャート
から 5 2024 まで 6 2024
Runway Growth Finance (NASDAQ:RWAY)
過去 株価チャート
から 6 2023 まで 6 2024