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 second
quarter ended June 30, 2024.
Second Quarter 2024
Highlights
- Total investment income of $34.2 million
- Net investment income of $14.6 million, or $0.37 per share
- Net asset value of $13.14 per share
- Dollar-weighted annualized yield on debt investments of 15.1%
for the quarter
- Two investments completed in new portfolio companies
representing $75.5 million in funded loans
- Aggregate proceeds of $25.3 million received from principal
prepayments, and $1.3 million received from scheduled
amortizations
- Repurchased 1,074,842 shares of the Company's common stock
during the second quarter under previously authorized $25.0 million
share repurchase program
Third Quarter 2024
Distributions
- Declared third quarter 2024 regular dividend of $0.40 per
share
- Declared third quarter 2024 supplemental dividend of $0.05 per
share
“In the second quarter, Runway Growth executed on two new
investments as the Company thoughtfully expanded its high quality,
late-stage portfolio,” said David Spreng, Founder and CEO of Runway
Growth. “Heading into the second half of the year our pipeline is
strong, and we remain focused on the performance of our portfolio
while capitalizing on opportunities to re-deploy capital and
increase the overall diversification of our investments. As a
result of our strict underwriting and ongoing monitoring of our
portfolio, we feel confident in our ability to position our
shareholders for long-term returns.”
Second Quarter 2024 Operating
Results
Total investment income for the quarter ended June 30, 2024 was
$34.2 million, compared to $41.9 million for the quarter ended June
30, 2023.
Net investment income for the quarter ended June 30, 2024 was
$14.6 million, or $0.37 per share, compared to $19.7 million, or
$0.49 per share, for the quarter ended June 30, 2023.
The Company's dollar-weighted annualized yield on average debt
investments for the quarter ended June 30, 2024 was 15.1%. 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, including investments on non-accrual
status, outstanding during the period.
Total operating expenses for the quarter ended June 30, 2024
were $19.6 million, compared to $22.2 million for the quarter ended
June 30, 2023.
Net realized gain (loss) on investments was zero for both
quarters ended June 30, 2024 and June 30, 2023.
For the quarter ended June 30, 2024, net change in unrealized
loss on investments was $6.3 million, compared to a net change in
unrealized gain on investments of $2.6 million for the comparable
prior year period.
Portfolio and Investment
Activity
As of June 30, 2024, Runway Growth’s investment portfolio had an
aggregate fair value of approximately $1.06 billion in 55 portfolio
companies, and was comprised of approximately $1.02 billion in term
loans, 98.6% of which are senior secured loans, and $48.2 million
in warrants and other equity-related investments.
During the second quarter of 2024, Runway Growth funded $0.7
million in the Runway-Cadma I LLC joint venture, and completed two
investments in new portfolio companies, representing $75.4 million
in funded loans, net of upfront loan origination fees.
Total portfolio investment activity for the three and six months
ended June 30, 2024 was as follows:
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Beginning investment portfolio |
$ |
|
1,016,332 |
|
|
$ |
|
1,160,316 |
|
|
$ |
|
1,067,009 |
|
|
$ |
|
1,126,309 |
|
Purchases of
investments |
|
|
75,383 |
|
|
|
|
50,669 |
|
|
|
|
100,025 |
|
|
|
|
63,540 |
|
Purchases of U.S.
Treasury Bills |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
34,974 |
|
PIK interest |
|
|
2,687 |
|
|
|
|
6,028 |
|
|
|
|
6,863 |
|
|
|
|
9,783 |
|
Sales and
prepayments of investments |
|
|
(25,312 |
) |
|
|
|
(88,709 |
) |
|
|
|
(59,761 |
) |
|
|
|
(98,901 |
) |
Scheduled
repayments of investments |
|
|
(1,333 |
) |
|
|
|
(2,764 |
) |
|
|
|
(1,746 |
) |
|
|
|
(6,771 |
) |
Sales and
maturities of U.S. Treasury Bills |
|
|
— |
|
|
|
|
(35,000 |
) |
|
|
|
(42,029 |
) |
|
|
|
(35,000 |
) |
Amortization of
fixed income premiums or accretion of discounts |
|
|
1,867 |
|
|
|
|
2,137 |
|
|
|
|
5,880 |
|
|
|
|
5,005 |
|
Net realized gain
(loss) on investments |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
(1,178 |
) |
Net change in
unrealized gain (loss) on investments |
|
|
(6,300 |
) |
|
|
|
2,644 |
|
|
|
|
(12,917 |
) |
|
|
|
(2,440 |
) |
Ending investment
portfolio |
$ |
|
1,063,324 |
|
|
$ |
|
1,095,321 |
|
|
$ |
|
1,063,324 |
|
|
$ |
|
1,095,321 |
|
Net Asset Value
As of June 30, 2024, net asset value (“NAV”) per share was
$13.14, compared to $14.17 as of June 30, 2023. Total net assets at
the end of the second quarter was $506.4 million, down 12% from
$573.9 million as of June 30, 2023.
For the quarter ended June 30, 2024, net increase in net assets
resulting from operations was $8.3 million, or $0.21 per
share, compared to a net increase in net assets resulting from
operations of $22.3 million, or $0.55 per share, for the
quarter ended June 30, 2023.
Liquidity and Capital
Resources
As of June 30, 2024, the Company had approximately $249.8
million in available liquidity, including unrestricted cash and
cash equivalents of $8.8 million and $241.0 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 110%, compared to 91% for the quarter ended March 31,
2024.
Distributions
On July 30, 2024, the Company’s board of directors declared a
regular quarterly distribution of $0.40 per share for the third
quarter of 2024, payable on August 26, 2024, to stockholders of
record as of August 12, 2024. In addition, the Company’s board of
directors declared a supplemental distribution of $0.05 per share
for the third quarter of 2024 that is also payable on August 26,
2024 to stockholders of record as of August 12, 2024.
Share Repurchase Program
On November 2, 2023, the Company’s board of directors approved a
share repurchase program (the “Repurchase Program”), under which
the Company may repurchase up to $25.0 million of its outstanding
shares of common stock. Under the Repurchase Program, purchases may
be made at management’s discretion from time to time in open-market
transactions, in accordance with all applicable securities laws and
regulations. In the second quarter, the Company repurchased
approximately 1,074,842 shares under the Repurchase Program. The
Repurchase Program will terminate upon the earlier of (i) November
1, 2024 or (ii) the repurchase of $1.5 million remaining
availability under the Repurchase Program.
On July 30, 2024, the Company’s board of directors approved a
new share repurchase program (the “New Repurchase Program”) under
which the Company may repurchase up to $15.0 million of its
outstanding shares of common stock. Under the New Repurchase
Program, purchases may be made at management’s discretion from time
to time in open-market transactions, in accordance with all
applicable securities laws and regulations. If not renewed, the New
Repurchase Program will terminate upon the earlier of (i) July 30,
2025 or (ii) the repurchase of $15.0 million of the Company's
shares of common stock.
Recent Developments
The Company evaluated events subsequent to June 30, 2024 through
August 8, 2024, the date the consolidated financial statements were
issued.
On July 17, 2024, the Company increased its commitment to
Elevate Services Inc. by $20.0 million, of which $3.0 million was
funded at close.
On July 30, 2024, the Company's board of directors declared a
regular distribution of $0.40 per share and a supplemental
distribution of $0.05 per share for stockholders of record as of
August 12, 2024, payable on or before August 26, 2024.
On July 31, 2024, Cloudpay, Inc. prepaid its outstanding
principal balance of $75.0 million on the Company's senior secured
loan.
Conference Call
Runway Growth will hold a conference call to discuss its second
quarter ended June 30, 2024 financial results at 2:00 p.m. PT (5:00
p.m. ET) on Thursday, August 8, 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, as amended. 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 report on Form 10-K 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, 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) |
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Investments at fair
value: |
|
|
|
|
|
|
|
|
Non-control/non-affiliate investments at fair value (cost of
$1,055,456 and $1,005,024, respectively) |
|
$ |
|
1,011,472 |
|
|
$ |
|
972,604 |
|
Affiliate investments at fair value (cost of $59,025 and $58,861,
respectively) |
|
|
|
50,373 |
|
|
|
|
51,456 |
|
Control investments at fair value (cost of $1,600 and $950,
respectively) |
|
|
|
1,479 |
|
|
|
|
950 |
|
Investment in U.S. Treasury Bills at fair value (cost of $0 and
$42,014, respectively) |
|
|
|
— |
|
|
|
|
41,999 |
|
Total investments at fair value (cost of $1,116,081 and $1,106,849,
respectively) |
|
|
|
1,063,324 |
|
|
|
|
1,067,009 |
|
Cash and cash equivalents |
|
|
|
8,810 |
|
|
|
|
2,970 |
|
Interest and fees
receivable |
|
|
|
5,760 |
|
|
|
|
8,269 |
|
Other assets |
|
|
|
342 |
|
|
|
|
905 |
|
Total assets |
|
|
|
1,078,236 |
|
|
|
|
1,079,153 |
|
Liabilities |
|
|
|
|
|
|
|
|
Debt: |
|
|
|
|
|
|
|
|
Credit facility |
|
|
|
309,000 |
|
|
|
|
272,000 |
|
2026 Notes |
|
|
|
95,000 |
|
|
|
|
95,000 |
|
2027 Notes |
|
|
|
152,250 |
|
|
|
|
152,250 |
|
Unamortized deferred debt costs |
|
|
|
(7,562 |
) |
|
|
|
(9,172 |
) |
Total debt, less unamortized deferred debt costs |
|
|
|
548,688 |
|
|
|
|
510,078 |
|
Incentive fees payable |
|
|
|
13,865 |
|
|
|
|
12,500 |
|
Interest payable |
|
|
|
7,010 |
|
|
|
|
6,764 |
|
Accrued expenses and other
liabilities |
|
|
|
2,289 |
|
|
|
|
2,740 |
|
Total liabilities |
|
|
|
571,852 |
|
|
|
|
532,082 |
|
Net
assets |
|
|
|
|
|
|
|
|
Common stock, par value |
|
|
|
414 |
|
|
|
|
414 |
|
Additional paid-in capital |
|
|
|
605,108 |
|
|
|
|
605,110 |
|
Distributable earnings (losses) |
|
|
|
(64,872 |
) |
|
|
|
(47,637 |
) |
Treasury stock |
|
|
|
(34,266 |
) |
|
|
|
(10,816 |
) |
Total net assets |
|
$ |
|
506,384 |
|
|
$ |
|
547,071 |
|
|
|
|
|
|
|
|
|
|
Shares of common stock
outstanding ($0.01 par value, 100,000,000 shares authorized) |
|
|
|
38,547,295 |
|
|
|
|
40,509,269 |
|
Net asset value per share |
|
$ |
|
13.14 |
|
|
$ |
|
13.50 |
|
RUNWAY GROWTH FINANCE CORP.Consolidated Statements
of Operations(Unaudited)(In thousands,
except share and per share data) |
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Investment
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From non-control/non-affiliate investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
|
30,935 |
|
|
$ |
|
33,818 |
|
|
$ |
|
65,390 |
|
|
$ |
|
68,671 |
|
Payment-in-kind interest income |
|
|
|
2,330 |
|
|
|
|
6,425 |
|
|
|
|
6,537 |
|
|
|
|
10,221 |
|
Dividend income |
|
|
|
— |
|
|
|
|
319 |
|
|
|
|
— |
|
|
|
|
643 |
|
Fee income |
|
|
|
187 |
|
|
|
|
615 |
|
|
|
|
807 |
|
|
|
|
660 |
|
From affiliate investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
600 |
|
|
|
|
593 |
|
|
|
|
1,199 |
|
|
|
|
885 |
|
Other income |
|
|
|
141 |
|
|
|
|
125 |
|
|
|
|
269 |
|
|
|
|
125 |
|
Total investment income |
|
|
|
34,193 |
|
|
|
|
41,895 |
|
|
|
|
74,202 |
|
|
|
|
81,205 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees |
|
|
|
3,946 |
|
|
|
|
4,337 |
|
|
|
|
7,898 |
|
|
|
|
8,296 |
|
Incentive fees |
|
|
|
3,649 |
|
|
|
|
4,920 |
|
|
|
|
8,317 |
|
|
|
|
9,483 |
|
Interest and other debt financing expenses |
|
|
|
10,867 |
|
|
|
|
11,410 |
|
|
|
|
21,727 |
|
|
|
|
22,330 |
|
Professional fees |
|
|
|
253 |
|
|
|
|
490 |
|
|
|
|
915 |
|
|
|
|
1,038 |
|
Administration agreement expenses |
|
|
|
472 |
|
|
|
|
615 |
|
|
|
|
1,036 |
|
|
|
|
1,198 |
|
Insurance expense |
|
|
|
209 |
|
|
|
|
268 |
|
|
|
|
417 |
|
|
|
|
536 |
|
Tax expense |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
2 |
|
|
|
|
50 |
|
Other expenses |
|
|
|
206 |
|
|
|
|
179 |
|
|
|
|
635 |
|
|
|
|
352 |
|
Total operating expenses |
|
|
|
19,602 |
|
|
|
|
22,219 |
|
|
|
|
40,947 |
|
|
|
|
43,283 |
|
Net investment
income |
|
|
|
14,591 |
|
|
|
|
19,676 |
|
|
|
|
33,255 |
|
|
|
|
37,922 |
|
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 |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
(1,178 |
) |
Net realized gain (loss) on investments, including U.S. Treasury
Bills |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
(1,178 |
) |
Net change in unrealized gain (loss) on non-control/non-affiliate
investments, including U.S. Treasury Bills |
|
|
|
(6,484 |
) |
|
|
|
1,538 |
|
|
|
|
(11,549 |
) |
|
|
|
117 |
|
Net change in unrealized gain (loss) on affiliate investments |
|
|
|
305 |
|
|
|
|
(103 |
) |
|
|
|
(1,247 |
) |
|
|
|
(6,089 |
) |
Net change in unrealized gain (loss) on control investments |
|
|
|
(121 |
) |
|
|
|
1,209 |
|
|
|
|
(121 |
) |
|
|
|
3,532 |
|
Net change in unrealized gain (loss) on investments, including U.S.
Treasury Bills |
|
|
|
(6,300 |
) |
|
|
|
2,644 |
|
|
|
|
(12,917 |
) |
|
|
|
(2,440 |
) |
Net realized and
unrealized gain (loss) on investments |
|
|
|
(6,300 |
) |
|
|
|
2,644 |
|
|
|
|
(12,917 |
) |
|
|
|
(3,618 |
) |
Net increase
(decrease) in net assets resulting from operations |
|
$ |
|
8,291 |
|
|
$ |
|
22,320 |
|
|
$ |
|
20,338 |
|
|
$ |
|
34,304 |
|
Net investment income per
common share (basic and diluted) |
|
$ |
|
0.37 |
|
|
$ |
|
0.49 |
|
|
$ |
|
0.84 |
|
|
$ |
|
0.94 |
|
Net increase (decrease) in net
assets resulting from operations per common share (basic and
diluted) |
|
$ |
|
0.21 |
|
|
$ |
|
0.55 |
|
|
$ |
|
0.51 |
|
|
$ |
|
0.85 |
|
Weighted average shares
outstanding (basic and diluted) |
|
|
|
39,180,767 |
|
|
|
|
40,509,269 |
|
|
|
|
39,786,511 |
|
|
|
|
40,509,269 |
|
Runway Growth Finance (NASDAQ:RWAY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Runway Growth Finance (NASDAQ:RWAY)
Historical Stock Chart
From Sep 2023 to Sep 2024