Phenixfin Corporation · NASDAQ:PFX
Phenixfin — Medley Capital — Q1 2018 Earnings Presentation
19 slides from Phenixfin's earnings presentation, 2018
Slide 1: Medley Capital Corporation Investor Presentation
Medley Capital Corporation (NYSE: MCC) Investor Presentation Quarter Ended December 31, 2017
Slide 2: Important Notice
Important Notice This presentation contains “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. Actual outcomes and results could differ materially from those suggested by this presentation du
Slide 3: Diversified AUM Across Multiple Funds
Diversified AUM Across Multiple Funds • Broad distribution through public and private vehicles • Permanent capital, long-dated funds and managed accounts not subject to traditional outflows MEDLEY (NYSE: MDLY) Public Vehicles Institutional Capital Medley Capital Sierra Long-Dated Funds and Corporati
Slide 4: Diversified Senior Secured Floating Rate Portfolio
Diversified Senior Secured Floating Rate Portfolio Investment Type Floating vs Fixed Rate1 20% 16% First Lien Fixed Second Lien 13% Floating Equities/Warrants 67% 84% Industry Geography2 Services: Business 8% Construction & Building 9% 3% 18% 3% Multisector Holdings 21% Western US 3% Healthcare & Ph
Slide 5: Portfolio by Issuer
Portfolio by Issuer Top 20 Investments: 62% MCC Senior Loan Strategy JV I LLC 8% Harrison Gypsum, LLC JFL-NGS Partners, LLC 6% URT Acquisition Holdings Corp. 38% NVTN LLC 5% AAR Intermediate Holdings, LLC Seotowncenter, Inc. 4% Capstone Nutrition Oxford Mining Company, LLC 4% L & S Plumbing Partners
Slide 6: Investment Strategy Shift
Investment Strategy Shift • Following a key investment strategy shift in 2015, the Company has consistently migrated towards first lien credit to larger, sponsor-backed borrowers, resulting in a significant loss rate reduction Investment Type1 Sponsor1 FY 2014 LTM 1Q18 FY 2014 LTM 1Q18 8.5% 13% 25%
Slide 7: Well Positioned for a Rising Rate Environment
Well Positioned for a Rising Rate Environment • MCC is well positioned for a rising interest Assets rate environment 12/31/2017 • 84% of the portfolio is floating rate • 69% of liabilities are fixed rate Fixed 16% • Favorable asset & liability mix The weighted average maturity of Floating 84% asse
Slide 8: Debt Maturity Profile
Debt Maturity Profile • MCC’s liabilities are well diversified with a staggered debt maturity profile • Pro-forma for post-quarter end debt issuance and term loan pay-down $200.0 SBA Debenture $150.0 Notes $5.03 USD in Millions $100.0 2021 2023 SBA Notes Notes Debenture (MCX) (MCV) Notes $50.0 $74.0
Slide 9: Attractive Industry Dynamics
Attractive Industry Dynamics
Slide 10: The Opportunity – Large Target Market
The Opportunity – Large Target Market • Standalone US middle market would rank as the 3rd largest global economy • Private equity dry powder continues to be elevated at all-time highs Top GDPs1 Revenue: Private Equity Dry Powder2 $500M - $1B $954 $16.8 $820 $755 $675 $690 $598 $562 $9.2 $6.7 $4.9 $3
Slide 11: The Opportunity – Large Number of Borrowers
The Opportunity – Large Number of Borrowers Number of Businesses by Market1 39,000 Revenue: 2,000 $500M - $1B Revenue: $50M - $500M Target Market: 37,000 2,600 Revenue: $1B+ Large Market Middle Market 1. U.S. Census Bureau, 2007 Economic Census. Page 11
Slide 12: The Opportunity – Bank Consolidation
The Opportunity – Bank Consolidation • Banks continue to shift toward large borrowers • Regulatory environment is a headwind for banks in the middle-market 11,000 U.S. FDIC Insured Commercial Banks¹ 80% Bank Participation in Levered Loan Market (%)² 70% 10,000 60% 9,000 50% 8,000 40% 7,000 30% 6,000
Slide 13: Regulatory Pressure Continues for Banks
Regulatory Pressure Continues for Banks Level 3 Assets for Financial Firms1 Total Assets of Publicly Traded BDCs2 $200 $681 $150 Large Opportunity as Banks Continue to Exit Level 3 Assets $100 $50 $152 $0 2003 2005 2007 2009 2011 2013 2015 1Q17 3Q17 Illustrative 2007 3Q17 Potential for Growth Total
Slide 14: MCC Financial Results
MCC Financial Results
Slide 15: Performance Overview
Performance Overview • Net investment income of $0.13 per share for the quarter ending 12/31/2017 • Net asset value of $7.71 per share for the quarter ending 12/31/2017 • Quarterly dividend of $0.16 per share for the quarter ending 12/31/2017 • 10.6% portfolio yield as of 12/31/20171 • Funded $66.8M
Slide 16: Financial & Portfolio Highlights
Financial & Portfolio Highlights Financial Highlights 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 9/30/16 Net investment income per share $ 0.13 $ 0.16 $ 0.18 $ 0.15 $ 0.19 $ 0.23 Net realized gains (losses) per share - (0.22) (1.01) - (0.12) (0.29) Loss on extinguishment of Debt - (0.01) - (0.01) - -
Slide 17: Select Financial & Portfolio Information
Select Financial & Portfolio Information As of and for the Three Months Ended (dollars in millions, except per share data) 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 Net investment income per share - basic & diluted 0.13 0.16 0.18 0.15 $ 0.19 Net realized and unrealized gains per share - basic & dilu
Slide 18: Balance Sheet
Balance Sheet As of (dollars in thousands, except per share data) 12/31/17 9/30/17 6/30/17 3/31/17 12/31/16 ASSETS (Unaudited) (Audited) (Unaudited) (Unaudited) (Unaudited) Investments at fair value Non-controlled/non-affiliated investments $ 565,542 $ 575,496 $ 608,166 $ 717,295 $ 730,316 Affiliate
Slide 19: Corporate Information
Corporate Information Board of Directors Corporate Officers Research Coverage Corporate Headquarters BROOK TAUBE BROOK TAUBE JANNEY CAPITAL MARKETS 280 Park Avenue, 6th Floor East Chairman & Chief Executive Officer Chairman & Chief Executive Officer Mitchel Penn, CFA – (410)-583-5976 New York, NY 10