Reports Another Quarter of Strong Financial
Performance, Recording Distributions of $0.54 per Share and
Achieving a $0.43 per Share Increase in NAV
Announces First Quarter 2024 Base
Distribution of $0.34 per Share
CION Investment Corporation (NYSE: CION) (“CION” or the
“Company”) today reported financial results for the fourth quarter
and year ended December 31, 2023 and filed its Form 10-K with the
U.S. Securities and Exchange Commission.
CION also announced that, on March 11, 2024, its co-chief
executive officers declared a first quarter 2024 base distribution
of $0.34 per share payable on March 28, 2024 to shareholders of
record as of March 22, 2024.
FOURTH QUARTER AND OTHER HIGHLIGHTS
- Net investment income and earnings per share for the quarter
ended December 31, 2023 were $0.40 per share and $0.94 per share,
respectively;
- Net asset value per share was $16.23 as of December 31, 2023
compared to $15.80 as of September 30, 2023, an increase of $0.43
per share, or 2.7%. The increase was primarily due to
mark-to-market price adjustments to the Company’s portfolio during
the quarter ended December 31, 2023;
- As of December 31, 2023, the Company had $1,092 million of
total principal amount of debt outstanding, of which 62% was
comprised of senior secured bank debt and 38% was comprised of
unsecured debt. The Company’s net debt-to-equity ratio was 1.10x as
of December 31, 2023 compared to 1.03x as of September 30,
2023;
- As of December 31, 2023, the Company had total investments at
fair value of $1,841 million in 111 portfolio companies across 24
industries. The investment portfolio was comprised of 86.6% senior
secured loans, including 85.0% in first lien investments;1
- During the quarter, the Company funded new investment
commitments of $147 million, funded previously unfunded commitments
of $7 million, and had sales and repayments totaling $83 million,
resulting in a net increase to the Company's funded portfolio of
$71 million;
- As of December 31, 2023, investments on non-accrual status
amounted to 0.9% and 3.5% of the total investment portfolio at fair
value and amortized cost, respectively, which are down from 1.0%
and 3.8%, respectively, as of September 30, 2023;
- During the quarter, the Company repurchased 280,168 shares of
its common stock under its 10b5-1 trading plan at an average price
of $10.35 per share for a total repurchase amount of $2.9 million.
Through December 31, 2023, the Company repurchased a total of
2,773,804 shares of its common stock under its 10b5-1 trading plan
at an average price of $9.72 per share for a total repurchase
amount of $27.0 million;
- On October 10, 2023, the Company completed a private offering
in Israel pursuant to which the Company issued approximately $34.1
million of its additional unsecured Series A Notes due 2026, which
bear interest at a floating rate equal to SOFR plus a credit spread
of 3.82% per year; and
- On November 8, 2023, the Company completed a private offering
pursuant to which the Company issued $100 million of its unsecured
notes due 2027, which bear interest at a floating rate equal to the
three-month SOFR plus a credit spread of 4.75% per year.
DISTRIBUTIONS
- For the quarter ended December 31, 2023, the Company paid a
quarterly base distribution totaling $18.4 million, or $0.34 per
share, and declared a special year-end distribution totaling $8.1
million, or $0.15 per share, paid on January 31, 2024 to
shareholders of record as of December 22, 2023, in addition to the
previously declared supplemental distribution totaling $2.7
million, or $0.05 per share, paid on January 15, 2024 to
shareholders of record as of December 29, 2023.
Michael A. Reisner, co-Chief Executive Officer of CION,
commented:
“2023 was another strong year for CION as we continued to
deliver NII in excess of our dividend. Our portfolio’s credit
performance continues to be robust, with non-accruals improving
further from Q3 to 0.90% of fair value at year-end, reflecting our
consistent investment and underwriting discipline. Looking ahead to
2024, we remain optimistic about our pipeline and the broader
middle market lending landscape, which we believe positions CION
well to achieve excellent risk-adjusted returns for
shareholders.”
SELECTED FINANCIAL HIGHLIGHTS
As of
(in thousands, except per share data)
December 31, 2023
September 30, 2023
Investment portfolio, at fair value1
$
1,840,824
$
1,727,943
Total debt outstanding2
$
1,092,344
$
1,008,212
Net assets
$
879,563
$
860,760
Net asset value per share
$
16.23
$
15.80
Debt-to-equity
1.24x
1.17x
Net debt-to-equity
1.10x
1.03x
Three Months Ended
(in thousands, except share and per share
data)
December 31, 2023
September 30, 2023
Total investment income
$
59,999
$
67,540
Total operating expenses and income tax
expense
$
38,241
$
37,550
Net investment income after taxes
$
21,758
$
29,990
Net realized losses
$
(351
)
$
(8,123
)
Net unrealized gains
$
29,585
$
25,606
Net increase in net assets resulting from
operations
$
50,992
$
47,473
Net investment income per share
$
0.40
$
0.55
Net realized and unrealized gains per
share
$
0.54
$
0.32
Earnings per share
$
0.94
$
0.87
Weighted average shares outstanding
54,292,065
54,561,367
Distributions declared per share
$
0.54
$
0.39
Total investment income for the three months ended December 31,
2023 and September 30, 2023 was $60.0 million and $67.5 million,
respectively. The decrease in total investment income was primarily
driven by a make-whole payment received and additional investment
income from restructuring activity during the three months ended
September 30, 2023.
Operating expenses for the three months ended December 31, 2023
and September 30, 2023 were $38.2 million and $37.6 million,
respectively. The increase in operating expenses was driven by
higher interest expense due to an increase in the Company's total
debt outstanding during the quarter ended December 31, 2023,
partially offset by lower advisory fees paid to CIM due to a
decrease in investment income as compared to the quarter ended
September 30, 2023.
PORTFOLIO AND INVESTMENT ACTIVITY1
A summary of the Company's investment activity for the three
months ended December 31, 2023 is as follows:
New Investment
Commitments
Sales and Repayments
Investment Type
$ in Thousands
% of Total
$ in Thousands
% of Total
Senior secured first lien debt
$
151,712
100
%
$
82,547
99
%
Senior secured second lien debt
—
—
5
—
Collateralized securities and structured
products - equity
—
—
62
—
Equity
—
—
391
1
%
Total
$
151,712
100
%
$
83,005
100
%
During the three months ended December 31, 2023, new investment
commitments were made across 5 new and 15 existing portfolio
companies. During the same period, the Company received the full
repayment on investments in 3 portfolio companies. As a result, the
number of portfolio companies increased from 109 as of September
30, 2023 to 111 as of December 31, 2023.
PORTFOLIO SUMMARY1
As of December 31, 2023, the Company’s investments consisted of
the following:
Investments at Fair
Value
Investment Type
$ in Thousands
% of Total
Senior secured first lien debt
$
1,565,171
85.0
%
Senior secured second lien debt
29,111
1.6
%
Collateralized securities and structured
products - equity
1,096
0.1
%
Unsecured debt
12,874
0.7
%
Equity
232,572
12.6
%
Total
$
1,840,824
100.0
%
The following table presents certain selected information
regarding the Company’s investments:
As of
December 31, 2023
September 30, 2023
Number of portfolio companies
111
109
Percentage of performing loans bearing a
floating rate3
92.5 %
92.5 %
Percentage of performing loans bearing a
fixed rate3
7.5 %
7.5 %
Yield on debt and other income producing
investments at amortized cost4
13.41 %
13.04 %
Yield on performing loans at amortized
cost4
13.98 %
13.55 %
Yield on total investments at amortized
cost
12.12 %
11.81 %
Weighted average leverage (net
debt/EBITDA)5
5.02x
4.78x
Weighted average interest coverage5
1.93x
1.93x
Median EBITDA6
$33.7 million
$33.7 million
As of December 31, 2023, investments on non-accrual status
represented 0.9% and 3.5% of the total investment portfolio at fair
value and amortized cost, respectively. As of September 30, 2023,
investments on non-accrual status represented 1.0% and 3.8% of the
total investment portfolio at fair value and amortized cost,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2023, the Company had $1,092 million of total
principal amount of debt outstanding, comprised of $672 million of
outstanding borrowings under its senior secured credit facilities
and $420 million of unsecured notes and term loans. The combined
weighted average interest rate on debt outstanding was 8.5% for the
quarter ended December 31, 2023. As of December 31, 2023, the
Company had $122 million in cash and short-term investments and
$153 million available under its financing arrangements.2
EARNING CONFERENCE CALL
CION will host an earnings conference call on Thursday, March
14, 2024 at 11:00 am Eastern Time to discuss its financial results
for the fourth quarter and year ended December 31, 2023. Please
visit the Investor Resources - Events and Presentations section of
the Company’s website at www.cionbdc.com for a slide presentation
that complements the earnings conference call.
All interested parties are invited to participate via telephone
or listen via the live webcast, which can be accessed by clicking
the following link: CION Investment Corporation Fourth Quarter and
Year End Conference Call. Domestic callers can access the
conference call by dialing (877) 484-6065. International callers
can access the conference call by dialing +1 (201) 689-8846. All
callers are asked to dial in approximately 10 minutes prior to the
call. An archived replay will be available on a webcast link
located in the Investor Resources - Events and Presentations
section of CION’s website.
ENDNOTES
1)
The discussion of the investment portfolio
excludes short-term investments.
2)
Total debt outstanding excludes netting of
debt issuance costs of $10.6 million and $8.0 million as of
December 31, 2023 and September 30, 2023,
respectively.
3)
The fixed versus floating composition has
been calculated as a percentage of performing debt investments
measured on a fair value basis, including income producing
preferred stock investments and excludes investments, if any, on
non-accrual status.
4)
Computed based on the (a) annual actual
interest rate or yield earned plus amortization of fees and
discounts on the performing debt and other income producing
investments as of the reporting date, divided by (b) the total
performing debt and other income producing investments (excluding
investments on non-accrual status) at amortized cost. This
calculation excludes exit fees that are receivable upon repayment
of the investment.
5)
For a particular portfolio company, the
Company calculates the level of contractual indebtedness net of
cash (“net debt”) owed by the portfolio company and compares that
amount to measures of cash flow available to service the net debt.
To calculate net debt, the Company includes debt that is both
senior and pari passu to the tranche of debt owned by it but
excludes debt that is legally and contractually subordinated in
ranking to the debt owned by the Company. The Company believes this
calculation method assists in describing the risk of its portfolio
investments, as it takes into consideration contractual rights of
repayment of the tranche of debt owned by the Company relative to
other senior and junior creditors of a portfolio company. The
Company typically calculates cash flow available for debt service
at a portfolio company by taking EBITDA for the trailing
twelve-month period. Weighted average net debt to EBITDA is
weighted based on the fair value of the Company's performing debt
investments and excluding investments where net debt to EBITDA may
not be the appropriate measure of credit risk, such as cash
collateralized loans and investments that are underwritten and
covenanted based on recurring revenue.
For a particular portfolio company, the
Company also calculates the level of contractual interest expense
owed by the portfolio company and compares that amount to EBITDA
(“interest coverage ratio”). The Company believes this calculation
method assists in describing the risk of its portfolio investments,
as it takes into consideration contractual interest obligations of
the portfolio company. Weighted average interest coverage is
weighted based on the fair value of the Company's performing debt
investments, and excludes investments where interest coverage may
not be the appropriate measure of credit risk, such as cash
collateralized loans and investments that are underwritten and
covenanted based on recurring revenue.
Portfolio company statistics, including
EBITDA, are derived from the financial statements most recently
provided to the Company for each portfolio company as of the
reported end date. Statistics of the portfolio companies have not
been independently verified by the Company and may reflect a
normalized or adjusted amount.
6)
Median EBITDA is calculated based on the
portfolio company's EBITDA as of the Company's initial
investment.
CĪON Investment
Corporation
Consolidated Balance
Sheets
(in thousands, except share
and per share amounts)
December 31, 2023
September 30, 2023
(unaudited)
(unaudited)
Assets
Investments, at fair value:
Non-controlled, non-affiliated investments
(amortized cost of $1,610,822 and $1,555,700, respectively)
$
1,570,676
$
1,508,505
Non-controlled, affiliated investments
(amortized cost of $210,103 and $207,222, respectively)
206,301
201,617
Controlled investments (amortized cost of
$154,705 and $132,900, respectively)
177,293
134,755
Total investments, at fair value
(amortized cost of $1,975,630 and $1,895,822, respectively)
1,954,270
1,844,877
Cash
8,415
6,805
Interest receivable on investments
36,724
40,378
Receivable due on investments sold and
repaid
967
2,646
Dividends receivable on investments
—
82
Prepaid expenses and other assets
1,348
1,552
Total assets
$
2,001,724
$
1,896,340
Liabilities and Shareholders'
Equity
Liabilities
Financing arrangements (net of unamortized
debt issuance costs of $10,643 and $8,001, respectively)
$
1,081,701
$
1,000,211
Payable for investments purchased
4,692
9,663
Accounts payable and accrued expenses
1,036
1,510
Interest payable
10,231
7,238
Accrued management fees
6,893
6,741
Accrued subordinated incentive fee on
income
4,615
6,362
Accrued administrative services
expense
2,156
1,064
Share repurchases payable
—
67
Shareholder distribution payable
10,837
2,724
Total liabilities
1,122,161
1,035,580
Shareholders' Equity
Common stock, $0.001 par value;
500,000,000 shares authorized; 54,184,636 and 54,477,427 shares
issued, and 54,184,636 and 54,464,804 shares outstanding,
respectively
54
54
Capital in excess of par value
1,033,030
1,035,929
Accumulated distributable losses
(153,521
)
(175,223
)
Total shareholders' equity
879,563
860,760
Total liabilities and shareholders'
equity
$
2,001,724
$
1,896,340
Net asset value per share of common stock
at end of period
$
16.23
$
15.80
CĪON Investment
Corporation
Consolidated Statements of
Operations
(in thousands, except share
and per share amounts)
Three Months Ended December
31,
Year Ended December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
Investment income
Non-controlled, non-affiliated
investments
Interest income
$
43,096
$
40,481
$
184,013
$
140,560
Paid-in-kind interest income
6,581
6,642
22,317
22,737
Fee income
3,127
974
7,871
9,019
Dividend income
128
—
210
103
Non-controlled, affiliated investments
Paid-in-kind interest income
2,419
2,711
8,372
6,204
Interest income
1,519
1,348
7,068
5,865
Dividend income
—
13
3,946
79
Fee income
—
—
2,432
525
Controlled investments
Interest income
2,786
—
8,090
6,049
Dividend income
—
1,275
4,250
1,275
Paid-in-kind interest income
2
2,056
1,050
2,482
Fee income
341
—
1,391
—
Total investment income
59,999
55,500
251,010
194,898
Operating expenses
Management fees
6,893
6,925
26,856
27,361
Administrative services expense
1,228
1,114
3,971
3,348
Subordinated incentive fee on income
4,615
5,065
22,277
18,710
General and administrative
1,422
1,317
7,382
7,278
Interest expense
24,023
16,855
85,556
49,624
Total operating expenses
38,181
31,276
146,042
106,321
Net investment income before taxes
21,818
24,224
104,968
88,577
Income tax expense (benefit), including
excise tax
60
347
(54
)
372
Net investment income after taxes
21,758
23,877
105,022
88,205
Realized and unrealized gains
(losses)
Net realized losses on:
Non-controlled, non-affiliated
investments
(351
)
(15,692
)
(31,927
)
(11,217
)
Non-controlled, affiliated investments
—
—
—
(21,530
)
Foreign currency
—
—
—
(3
)
Net realized losses
(351
)
(15,692
)
(31,927
)
(32,750
)
Net change in unrealized appreciation
(depreciation) on:
Non-controlled, non-affiliated
investments
7,050
5,839
15,658
(19,807
)
Non-controlled, affiliated investments
1,801
(86
)
(7,335
)
13,523
Controlled investments
20,734
(4,403
)
13,896
970
Net change in unrealized appreciation
(depreciation)
29,585
1,350
22,219
(5,314
)
Net realized and unrealized gains
(losses)
29,234
(14,342
)
(9,708
)
(38,064
)
Net increase in net assets resulting from
operations
$
50,992
$
9,535
$
95,314
$
50,141
Per share information—basic and
diluted
Net increase in net assets per share
resulting from operations
$
0.94
$
0.17
$
1.74
$
0.89
Net investment income per share
$
0.40
$
0.43
$
1.92
$
1.56
Weighted average shares of common stock
outstanding
54,292,065
55,505,248
54,685,327
56,556,510
ABOUT CION INVESTMENT CORPORATION
CION Investment Corporation is a leading publicly listed
business development company that had approximately $2.0 billion in
total assets as of December 31, 2023. CION seeks to generate
current income and, to a lesser extent, capital appreciation for
investors by focusing primarily on senior secured loans to U.S.
middle-market companies. CION is advised by CION Investment
Management, LLC, a registered investment adviser and an affiliate
of CION. For more information, please visit www.cionbdc.com.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that
involve substantial risks and uncertainties. You can identify these
statements by the use of forward-looking terminology such as “may,”
“will,” “should,” “expect,” “anticipate,” “project,” “target,”
“estimate,” “intend,” “continue,” or “believe” or the negatives
thereof or other variations thereon or comparable terminology. You
should read statements that contain these words carefully because
they discuss CION’s plans, strategies, prospects and expectations
concerning its business, operating results, financial condition and
other similar matters. These statements represent CION’s belief
regarding future events that, by their nature, are uncertain and
outside of CION’s control. There are likely to be events in the
future, however, that CION is not able to predict accurately or
control. Any forward-looking statement made by CION in this press
release speaks only as of the date on which it is made. Factors or
events that could cause CION’s actual results to differ, possibly
materially from its expectations, include, but are not limited to,
the risks, uncertainties and other factors CION identifies in the
sections entitled “Risk Factors” and “Forward-Looking Statements”
in filings CION makes with the SEC, and it is not possible for CION
to predict or identify all of them. CION undertakes no obligation
to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
OTHER INFORMATION
The information in this press release is summary information
only and should be read in conjunction with CION’s Annual Report on
Form 10-K, which CION filed with the SEC on March 14, 2024, as well
as CION’s other reports filed with the SEC. A copy of CION’s Annual
Report on Form 10-K and CION’s other reports filed with the SEC can
be found on CION’s website at www.cionbdc.com and the SEC’s website
at www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240314704513/en/
Media Susan Armstrong sarmstrong@cioninvestments.com
Investor Relations Charlie Arestia
carestia@cioninvestments.com (646) 845-8259 Analysts and
Institutional Investors James Carbonara Hayden IR
(646)-755-7412 James@haydenir.com
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