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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CION Investment Corporation | NYSE:CION | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.04 | 0.33% | 12.34 | 12.43 | 12.25 | 12.25 | 82,884 | 22:00:00 |
Reports Another Solid Quarterly Performance, Out Earning the Total Distribution by 41% and Achieving a $0.49 per Share Increase in NAV
Announces Fourth Quarter 2023 Base Distribution of $0.34 per Share
CION Investment Corporation (NYSE: CION) (“CION” or the “Company”) today reported financial results for the third quarter ended September 30, 2023 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.
CION also announced that, on November 6, 2023, its co-chief executive officers declared a fourth quarter 2023 regular distribution of $0.34 per share payable on December 15, 2023 to shareholders of record as of December 1, 2023.
THIRD QUARTER AND OTHER HIGHLIGHTS
DISTRIBUTIONS
SUBSEQUENT EVENTS
Michael A. Reisner, co-Chief Executive Officer of CION, commented:
“We are pleased to have delivered another strong quarter, supported by NII out-earning the dividends and quarterly NAV growth. Our credit performance remains robust, with a decline in non-accruals, down to 1.03% of fair value, and 99% of our portfolio is risk-rated at 3 or higher. We continue to focus on first lien loans to true middle-market companies and have once again demonstrated our ability to access the lending markets, expanding our unsecured debt offering, and maintaining a conservative approach to leverage—all while delivering strong returns to our investors. As we look ahead, CION is strategically positioned to deliver robust returns to shareholders."
SELECTED FINANCIAL HIGHLIGHTS
As of
(in thousands, except per share data)
September 30, 2023
June 30, 2023
Investment portfolio, at fair value1
$
1,727,943
$
1,687,691
Total debt outstanding2
$
1,008,212
$
985,712
Net assets
$
860,760
$
836,364
Net asset value per share
$
15.80
$
15.31
Debt-to-equity
1.17x
1.18x
Net debt-to-equity
1.03x
1.04x
Three Months Ended
(in thousands, except share and per share data)
September 30, 2023
June 30, 2023
Total investment income
$
67,540
$
58,496
Total operating expenses and income tax expense
$
37,550
$
35,080
Net investment income after taxes
$
29,990
$
23,416
Net realized losses
$
(8,123
)
$
(18,928
)
Net unrealized gains
$
25,606
$
23,406
Net increase in net assets resulting from operations
$
47,473
$
27,894
Net investment income per share
$
0.55
$
0.43
Net realized and unrealized gains per share
$
0.32
$
0.08
Earnings per share
$
0.87
$
0.51
Weighted average shares outstanding
54,561,367
54,788,740
Distributions declared per share
$
0.39
$
0.34
Total investment income for the three months ended September 30, 2023 and June 30, 2023 was $67.5 million and $58.5 million, respectively. The increase in investment income was primarily driven by make-whole payments received on certain investments during the three months ended September 30, 2023.
Operating expenses for the three months ended September 30, 2023 and June 30, 2023 were $37.6 million and $35.1 million, respectively. During the quarter ended September 30, 2023, the Company incurred higher advisory fees due to an increase in investment income and higher interest expense because of an increase in SOFR and LIBOR rates as compared to the quarter ended June 30, 2023.
PORTFOLIO AND INVESTMENT ACTIVITY1
A summary of the Company's investment activity for the three months ended September 30, 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
$
96,427
100
%
$
96,283
100
%
Senior secured second lien debt
—
—
5
—
Collateralized securities and structured products - equity
—
—
86
—
Equity
377
—
—
—
Total
$
96,804
100
%
$
96,374
100
%
During the three months ended September 30, 2023, new investment commitments were made across 3 new and 11 existing portfolio companies. During the same period, the Company received the full repayment on investments in 5 portfolio companies and sold all investments in 1 portfolio company. As a result, the number of portfolio companies decreased from 112 as of June 30, 2023 to 109 as of September 30, 2023.
PORTFOLIO SUMMARY1
As of September 30, 2023, the Company’s investments consisted of the following:
Investments at Fair Value
Investment Type
$ in
Thousands
%
of Total
Senior secured first lien debt
$
1,481,498
85.7
%
Senior secured second lien debt
36,114
2.1
%
Collateralized securities and structured products - equity
1,224
0.1
%
Unsecured debt
14,631
0.8
%
Equity
194,476
11.3
%
Total
$
1,727,943
100.0
%
The following table presents certain selected information regarding the Company’s investments:
As of
September 30, 2023
June 30, 2023
Number of portfolio companies
109
112
Percentage of performing loans bearing a floating rate3
92.5 %
92.2 %
Percentage of performing loans bearing a fixed rate3
7.5 %
7.8 %
Yield on debt and other income producing investments at amortized cost4
13.04 %
12.38 %
Yield on performing loans at amortized cost4
13.55 %
13.10 %
Yield on total investments at amortized cost
11.81 %
11.45 %
Weighted average leverage (net debt/EBITDA)5
4.78x
4.83x
Weighted average interest coverage5
1.93x
2.00x
Median EBITDA6
$33.7 million
$35.0 million
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. As of June 30, 2023, investments on non-accrual status represented 1.7% and 4.8% of the total investment portfolio at fair value and amortized cost, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2023, the Company had $1,008 million of total principal amount of debt outstanding, comprised of $722 million of outstanding borrowings under its senior secured credit facilities and $286 million of unsecured notes and term loans. The combined weighted average interest rate on debt outstanding was 8.3% for the quarter ended September 30, 2023. As of September 30, 2023, the Company had $124 million in cash and short-term investments and $103 million available under its financing arrangements.2
EARNING CONFERENCE CALL
CION will host an earnings conference call on Thursday, November 9, 2023 at 11:00 am Eastern Time to discuss its financial results for the third quarter ended September 30, 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 2023 Third Quarter 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
CION Investment Corporation
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
September 30, 2023
June 30, 2023
(unaudited)
(unaudited)
Assets
Investments, at fair value:
Non-controlled, non-affiliated investments (amortized cost of $1,555,700 and $1,583,865, respectively)
$
1,508,505
$
1,510,372
Non-controlled, affiliated investments (amortized cost of $207,222 and $204,248, respectively)
201,617
198,084
Controlled investments (amortized cost of $132,900 and $76,900, respectively)
134,755
80,006
Total investments, at fair value (amortized cost of $1,895,822 and $1,865,013, respectively)
1,844,877
1,788,462
Cash
6,805
11,515
Interest receivable on investments
40,378
33,200
Receivable due on investments sold and repaid
2,646
997
Dividends receivable on investments
82
—
Prepaid expenses and other assets
1,552
608
Total assets
$
1,896,340
$
1,834,782
Liabilities and Shareholders' Equity
Liabilities
Financing arrangements (net of unamortized debt issuance costs of $8,001 and $8,976, respectively)
$
1,000,211
$
976,737
Payable for investments purchased
9,663
—
Accounts payable and accrued expenses
1,510
1,344
Interest payable
7,238
8,183
Accrued management fees
6,741
6,546
Accrued subordinated incentive fee on income
6,362
4,967
Accrued administrative services expense
1,064
574
Share repurchases payable
67
67
Shareholder distribution payable
2,724
—
Total liabilities
1,035,580
998,418
Commitments and contingencies
Shareholders' Equity
Common stock, $0.001 par value; 500,000,000 shares authorized; 54,477,427 and 54,645,571 shares issued, and 54,464,804 and 54,632,827 shares outstanding, respectively
54
55
Capital in excess of par value
1,035,929
1,037,729
Accumulated distributable losses
(175,223
)
(201,420
)
Total shareholders' equity
860,760
836,364
Total liabilities and shareholders' equity
$
1,896,340
$
1,834,782
Net asset value per share of common stock at end of period
$
15.80
$
15.31
CION Investment Corporation
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
Year Ended
December 31,
2023
2022
2023
2022
2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Investment income
Non-controlled, non-affiliated investments
Interest income
$
51,032
$
37,336
$
140,917
$
100,079
$
140,560
Paid-in-kind interest income
6,608
6,876
15,736
16,095
22,737
Fee income
2,447
4,542
4,744
8,045
9,019
Dividend income
82
57
82
103
103
Non-controlled, affiliated investments
Paid-in-kind interest income
2,471
1,174
5,953
3,493
6,204
Interest income
1,341
1,949
5,549
4,517
5,865
Dividend income
13
13
3,946
66
79
Fee income
35
19
2,432
525
525
Controlled investments
Interest income
1,413
2,197
5,304
6,066
6,049
Dividend income
—
—
4,250
—
1,275
Paid-in-kind interest income
1,048
—
1,048
409
2,482
Total investment income
67,540
54,163
191,011
139,398
194,898
Operating expenses
Management fees
6,741
6,942
19,963
20,436
27,361
Administrative services expense
996
733
2,743
2,234
3,348
Subordinated incentive fee on income
6,362
5,421
17,662
13,645
18,710
General and administrative
1,931
2,027
5,960
5,961
7,278
Interest expense
21,757
13,469
61,533
32,769
49,624
Total operating expenses
37,787
28,592
107,861
75,045
106,321
Net investment income before taxes
29,753
25,571
83,150
64,353
88,577
Income tax (benefit) expense, including excise tax
(237
)
14
(114
)
25
372
Net investment income after taxes
29,990
25,557
83,264
64,328
88,205
Realized and unrealized gains (losses)
Net realized (losses) gains on:
Non-controlled, non-affiliated investments
(8,123
)
4,267
(31,576
)
4,475
(11,217
)
Non-controlled, affiliated investments
—
(21,433
)
—
(21,530
)
(21,530
)
Foreign currency
—
(3
)
—
(3
)
(3
)
Net realized losses
(8,123
)
(17,169
)
(31,576
)
(17,058
)
(32,750
)
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments
26,298
(669
)
8,608
(25,646
)
(19,807
)
Non-controlled, affiliated investments
559
18,966
(9,136
)
13,609
13,523
Controlled investments
(1,251
)
7,298
(6,838
)
5,373
970
Net change in unrealized appreciation (depreciation)
25,606
25,595
(7,366
)
(6,664
)
(5,314
)
Net realized and unrealized gains (losses)
17,483
8,426
(38,942
)
(23,722
)
(38,064
)
Net increase in net assets resulting from operations
$
47,473
$
33,983
$
44,322
$
40,606
$
50,141
Per share information—basic and diluted
Net increase in net assets per share resulting from operations
$
0.87
$
0.60
$
0.81
$
0.71
$
0.89
Net investment income per share
$
0.55
$
0.45
$
1.52
$
1.13
$
1.56
Weighted average shares of common stock outstanding
54,561,367
56,816,992
54,817,855
56,910,773
56,556,510
ABOUT CION INVESTMENT CORPORATION
CION Investment Corporation is a leading publicly listed business development company that had approximately $1.9 billion in total assets as of September 30, 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 Quarterly Report on Form 10-Q, which CION filed with the SEC on November 9, 2023, as well as CION’s other reports filed with the SEC. A copy of CION’s Quarterly Report on Form 10-Q 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/20231109335663/en/
Media Susan Armstrong sarmstrong@cioninvestments.com
Investor Relations 1-800-343-3736
Analysts and Institutional Investors James Carbonara Hayden IR (646)-755-7412 James@haydenir.com
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