PhenixFIN (PFX) 7 Dec 172017 Q4 Earnings call transcript

Welcome and thank you for joining the Medley Capital Corporation's Fiscal Fourth Quarter 2017 Conference Call. The Company would like to remind everyone that today's call is being recorded. Please note that this call is the property of Medley Capital Corporation, and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay for the call will be available by using the telephone numbers and PIN provided in the Company's earnings press release. At this time, all participants are in a listen-only mode, but will be prompted for a question-and-answer session, following the prepared remarks. Investing. for CFO; Corporation Capital Sam Dean Head call CEO; Brook Markets; the Crowe, Allorto, Rick Anderson, of on Medley are Capital Taube, and Participating Head of

to results of risks www.medleycapitalcorp.com. not visit as Before statements by which call statements Safe we Company's any those other Company's and fact disclosure undertake Company's Today's press projections forward-looking forward-looking the statements and are to constitute could SEC. statements by a recent forward-looking release in such the those Company and release, than in also please conference begin, the would call reason most Harbor update To your the to Company's may the uncertainties. any differ the may of materially the required Any obtain copies disclosed attention filings latest at unless historical statement. the from customary regarding does information. to note Please statements law. press filings subject Company Company's like include expressed SEC forward-looking actual the forward-looking with for The website that

Section Relations quarter in addition, the to over Company's in presentation the Taube. I Investor now Company's the In is turn the Events/Investor available investor XXXX the call website. fourth fiscal Presentations would on to Section like Mr. Brook

XX. quarter September quarterly morning we This ended to announced call. very results you MCC's welcome financial for and Thank the everyone much, the

Our NAV was $X.XX income per net and $X.XX investment was share.

XX. of Board payable November December of the be $X.XX, X, on on November dividend our shareholders dividend to on of Directors announced a approved As XX will record

allowed The here were borrowers. origination of migration volume direct these this with continued at backed is loans, in $XX reflection the average sponsor sponsor $XX.X investing; continued we and capital, to to And a quarter during Turning the at and secured target our growth sizes do to expect deal larger X high for trend directly invested platform million. larger investment the Across institutional larger our from retail from this quarter of commitments. scale it's raise we loan EBITDA was to the platform flow senior, both can of an and this migration will of backed quality origination million, portfolio bulk its the this access and Medley channels, the benefits this loans MCC larger continue size. has in this We increasing continue and XXXX. borrowers,

average over this with see volume consistent in QX. calendar we Quarter-on-quarter it past would appears this be was market. this on closed our into did increase middle an yields, deal has really seen in be and the unchanged broader quarter, to this carried During trend we've and generally what deals,

borrowers. modest I seen the the respect there These to we a same, the and of to the of say since being been During entire that beginning was directionally deal XXXX in increased looking on leverage Throughout structure. reviewed, trends more of looking balance would total quarter, volume we're supply back at XXXX. we increase capital have permissiveness provided with have

portfolio we portfolio XX find there remains to and our continue Overall, markets. consisting covers companies diversified opportunities target investment that approximately loans, are senior loan at However, XX attractive secured XX% our industries. in of MCC

results. Financial over the geographically like diversified call be to Rick, financial the continue to turn review across now Officer We as to I'd U.S. Chief well to the our

Thank Brook. you,

XX or $XX.X June compared at $X.X The was Company months per the $X.XX $X.XX the September loss $X.XX net ended asset or $X.XX to per and a at of of investment million net XX, reported XX. value share. per For income share three share net million September

$X.X investment million, million and of million of million income. $XX.X income, interest was total quarter, and fee was $XX.X of income, the For $X.X income of comprised dividend

were professional consisted expenses the administrative and in operating of million interest total financing base expenses $X.X in in fees, and expenses, million, net $X $X.X fees, and administrative For million the million and management $XX.X quarter, and expenses. general

the million a from $XX.X loss realized the $X.X depreciation and Company net of investments of unrealized net For quarter, million. reported

the ended year to results, full per for $X.XX million now net $XX.X income net September Turning investment share. reported the $XX.X or million XX year or the per $X.XX and a share of of Company's loss

$X.X and income. investment interest management and million operating For million $XX.X expenses, of Total income, $XX.X net income of the of year of was million income fee $X.X comprised dividend and and million was were of total interest and expense incentive $XX.X expenses. $XX.X in million incentive general of financing fee and waivers professional consisting million million, management in administrator administrative expenses net $X.X and fees, base in million $XX.X fees,

unrealized the year realized million. the a $XX.X from $XX.X investments of reported appreciation loss net net and Company million For of

The As the approximately times $XXX credit debentures. SBA excluding revolving facility, X.XX Company's the outstanding concludes payable in of equaled of to SBIC turn September That million now was outstanding term debt at debt I'll $XX XX. financial September million, back payable, over loan including XX, review. million Brook. $XXX total my debt-to-equity ratio a $XXX on notes $XXX million of Company's call million and

thanks the time today. everyone for and Rick, Thanks,

We to work continue on hard portfolio. legacy our

a borrower through platform any we're XXXX the we of to to and reiterate, the there optimistic. discuss benefit capabilities as call going And continue more expands several transition mentioned this open this legacy continue investment these we for some equity in questions. instances we cases migration certain positions the towards become Operator, beginning of Also meaningful as of to expanding have our look these growing and here our on been set. the work MCC continues In of companies, upside would for from of mentioned, to is where beyond. have to legacy I've the in assets while As the expectation focus larger these in new equity I've can is year that portfolio past are origination quarters, XXXX as restructured. now that's to certain this part it be and in certain and positions premature

And line [Operator from question the a we Instructions] of [indiscernible]. have

line now Your is open.

a somewhat outlook seems dissipated. hold has year? is and market into level your spread for that it a compression at Brook, this the going trend What's next moving high equilibrium middle towards

platforms size, $XX to deal the the I two There are rising would look be getting would some deals. -- million competition $XXX that develops. mean general increasing that to think players be for harder raising at market, market but the enough it's to people of are going there seen loan the to $XX That bigger, seem capital it big rising. be the I for stability, just be so stability. to the volume for competition to some scale been but ticket think see our I hard occurring providing and seems raise million of folks smaller a they $XXX how the is call which target in is lead are getting spread people size argue which large its lot that it's money million the and irrefutable has that we'll size, million larger there have big and to It's bigger continues number to EBITDA think and trend all we as move data in and at been the let's not have, opportunity; if look an you they doesn't has dynamics bigger that to million be $XX to seems are players that to and it is of money, compete in that are flow to

it see find continuing Now opportunities this we're how we'll the to develops and XXXX. quarter in

this And I'd deductions just Congress for amount a businesses what but follow-up ask interest little of your like it's perhaps impact to take understand one that for view may on I potential is for early demand limit expense? question; to the capital? Should the know debt bit

to want and a Look, lending the balance to to and see loan extent in of the a this most trying capital expensive analyze piece. Sure. comes important valuable not source just feels corporate through. level, reiterate is have for and is At wait It business this America, we're can. to me what the on we we're to capital going high still I like to that the

So level loan at think growing even we that We'll flow may necessarily important or I don't it demand think have on that required may impact is subset cost capital think high the I wait side. the to through taxes corporations, on the the margin out provided and idea and a of to squeezes of America. that will remain scale the corporate this see but to capital

realized Which Rick. generated housekeeping deals is quarter this one item, loss? maybe just And for

equity The Sure. with [ph], and Lydel to [ph]. related was associated quarter by primarily was the investment offset realization this in Dream Finders gain that of the partially realized loss

of line question our [indiscernible]. next the And comes from

line Your open. is

to flow million cash deal that I which give suggested encouraging; was kind into would your wondering, an of First balance QX? you in some you the of regarding the of would $XXX commentary the of trend opportunity sheet on eat in have you that is that all,

We is additional expect and eat to in finish that to to of the we terms We XX% cash, of SBIC would some of has into into XXXX. deploy type the which in use expect look XXXX the requirements again, about as to that your deal. term

hear specific names? is posts oil of, sort what of some the to M&A it little or legacy sign it the more names, Secondly, are wondering into Kind posts your outreach you're the of you're or encouragement I'm without kind you're that specific what bit I'm some that making of getting seeing; seeing is activity price sign temper feeling glad investments, regarding of are towards encouraged? stack a you that's direct that

did a off top and optimistic but where this just stabilized, idiosyncratic are specifically become early come sign the situation to GDP, a to The too they positive, related are it's better overall some sort I valuable. EBITDA with give doing a to talk might cases beginning seeing meaningfully EBITDA. think to opportunities line came the to upside reiterate, significantly would that we're more feel on I some through of say still related borrower about not we're to want it's posts but and be I they or that commodity color, but increased if substantially

and sensibly that have more and the situations directional a this what's where but still have we in restructured turn in execute that on were upside if is business change, needed normal upside possible encouraging it's provider but loan So we we and happens. about liquidity the wouldn't side to

in good have So when on it's some point don't our news. and look to a here, going that it forward to be at -- you? Again, happen will does we'll history, that's before think help happened again I I timing reporting but

that's great you very you thank I questions. color, That's much. my really appreciate helpful, taking And

you. Thank

National of is Christopher next Our the Securities. question Testa from of line

Your open. line is

deal the Brook, EBITDA just us closed see you of I'm the kind some the of just curious, now platform, flow obviously, of you're across on ending on you've sweet up up-market. in the terms more where that give spot moving and co-invested is of kind kind do from of the way? for how average color if originations and that could much you

I'd $XX $XX million deal, vehicle so have position number I the is that by Medley; an say by co-invest. co-invest MCC definition so That a piece is specifically we on large invested call and just be -- hold a positions size will would of which because at the in larger the use another example. do to would a million as small we

on that business where end, $XX a see on the I'd on million $XX.X our move little million high million; say the liquid borrowers larger that's credit growing As end, at a around is will low deal and bit. closed was the million, EBITDA, size deal platform. quarter range to exclude I you $XX probably to mentioned, going to would average be Medley the going $XX this

MCC the kind period end that looking range. consuming, So this it higher where on $XX middle $XX the -- million $XX and is that are on of side, to direct at million was to million, of you

the that liquid borrowers it, helpful. you at theme, growing source kind with has staying easier venture? just that's you joint up of no And know, need deals it made that Medley; for Got platform to good when a -- as are to and that larger mentioned, just

ability most with -- has growing I'd has as investment high net. we're grows say and a but team quality the say there originate investment Yes, we've year look back expanded in either us. two, capability, margin, and growing overall add increase the or on last drag the on substantial or it I I over capability the been not looking our balance we platform the growing the like universe disciplines places certainly helped at to would

kind you're the to here I curious great the And for reauthorize stocks given the it. that commentary quarter, Got weighing been how trading? which is originations positive know, you the surrounding know potential of obviously where just just but repurchases versus the has this

it's good Yes, question. a

We might said has consider. the reauthorized rule that not past, point. it's not I in something have been reauthorized, that would out I've this not as but it we at

Okay. kind And item; level fees should to kind just of of for we rate stay run last a quarter? the little one of this just housekeeping me, the at professional for expect

Yes, you should.

that's it, Thank me. for questions. taking Got all for you my

session. conclude call Thank Q&A over turn today's I Mr. you. And Brook the any that back to for like would Taube closing remarks. to

you all Thank to in to and Thanks On the today. much holiday for early for send behalf very team XXXX. wishes season whole want look our our joining very best speaking of forward we again much.

great day. This program, thank does gentlemen, conclude may the disconnect. a Everyone now today's and in participation have you Ladies you conference. for