EX-99.1 2 tm2413780d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

 

CION INVESTMENT CORPORATION REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

 

Strong Operating Performance Drives Record Quarterly Net Investment Income and Increased
Second Quarter 2024 Base Distribution to $0.36 per Share

 

For Immediate Release

 

NEW YORK, May 9, 2024 — CION Investment Corporation (NYSE: CION) (“CION” or the “Company”) today reported financial results for the first quarter ended March 31, 2024 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.

 

CION also announced that, on May 6, 2024, its co-chief executive officers declared a second quarter 2024 base distribution of $0.36 per share, payable on June 17, 2024 to shareholders of record as of June 3, 2024, which is an increase of $0.02 per share, or 5.9%, from the $0.34 per share base distribution paid by the Company during the first quarter of 2024.

 

FIRST QUARTER AND OTHER HIGHLIGHTS

 

·Net investment income and earnings per share for the quarter ended March 31, 2024 were $0.60 per share and $0.12 per share, respectively;

 

·Net asset value per share was $16.05 as of March 31, 2024 compared to $16.23 as of December 31, 2023, a decrease of $0.18 per share, or 1.1%. The decrease was primarily due to mark-to-market price declines to the Company’s portfolio during the quarter ended March 31, 2024;

 

·As of March 31, 2024, the Company had $1.07 billion of total principal amount of debt outstanding, of which 61% was comprised of senior secured bank debt and 39% was comprised of unsecured debt. The Company’s net debt-to-equity ratio was 1.03x as of March 31, 2024 compared to 1.10x as of December 31, 2023;

 

·As of March 31, 2024, the Company had total investments at fair value of $1.74 billion in 109 portfolio companies across 25 industries. The investment portfolio was comprised of 85.8% senior secured loans, including 84.2% in first lien investments;1

 

·During the quarter, the Company funded new investment commitments of $107 million, funded previously unfunded commitments of $4 million, and had sales and repayments totaling $207 million, resulting in a net decrease to the Company's funded portfolio of $96 million;

 

·As of March 31, 2024, investments on non-accrual status amounted to 0.86% and 2.88% of the total investment portfolio at fair value and amortized cost, respectively, compared to 0.89% and 3.47%, respectively, as of December 31, 2023; and

 

·During the quarter, the Company repurchased 424,031 shares of its common stock under its 10b5-1 trading plan at an average price of $11.01 per share for a total repurchase amount of $4.7 million. Through March 31, 2024, the Company repurchased a total of 3,197,835 shares of its common stock under its 10b5-1 trading plan at an average price of $9.89 per share for a total repurchase amount of $31.6 million.

  

DISTRIBUTIONS

 

·For the quarter ended March 31, 2024, the Company paid a quarterly base distribution totaling $18.3 million, or $0.34 per share.

 

 

 

Michael A. Reisner, co-Chief Executive Officer of CION, commented:

 

“We reported another solid quarter this morning, continuing our momentum from 2023. Given our strong distribution coverage and outlook for the long-term earnings power of our portfolio, I am excited to announce an increase to our quarterly base dividend to $0.36 per share, up from $0.34 per share last quarter. The underlying credit performance in our portfolio remained strong, with non-accruals improving to 0.86% of fair value. While these trends reflect the rigor of our underwriting discipline and we are optimistic for continued performance in 2024, we remain conservatively levered on a net basis. As we look at our origination pipeline, we continue to see ample opportunities to deploy capital at attractive spreads to qualified middle market borrowers.”

 

SELECTED FINANCIAL HIGHLIGHTS

 

   As of 
(in thousands, except per share data)  March 31, 2024   December 31, 2023 
Investment portfolio, at fair value1  $1,740,700   $1,840,824 
Total debt outstanding2  $1,069,844   $1,092,344 
Net assets  $863,059   $879,563 
Net asset value per share  $16.05   $16.23 
Debt-to-equity   1.24x   1.24x
Net debt-to-equity   1.03x   1.10x

 

   Three Months Ended 
(in thousands, except share and per share data)  March 31, 2024   December 31, 2023 
Total investment income  $73,554   $59,999 
Total operating expenses and income tax expense  $40,961   $38,241 
Net investment income after taxes  $32,593   $21,758 
Net realized losses  $(9,736)  $(351)
Net unrealized (losses) gains  $(16,412)  $29,585 
Net increase in net assets resulting from operations  $6,445   $50,992 
           
Net investment income per share  $0.60   $0.40 
Net realized and unrealized (losses) gains per share  $(0.48)  $0.54 
Earnings per share  $0.12   $0.94 
           
Weighted average shares outstanding   53,960,698    54,292,065 
Distributions declared per share  $0.34   $0.54 

 

Total investment income for the three months ended March 31, 2024 and December 31, 2023 was $73.6 million and $60.0 million, respectively. The increase in total investment income was primarily driven by additional investment income from origination and restructuring activities and fees received in connection with the repayment of portfolio investments during the three months ended March 31, 2024.

 

Operating expenses for the three months ended March 31, 2024 and December 31, 2023 were $41.0 million and $38.2 million, respectively. The increase in operating expenses was primarily driven by higher advisory fees due to an increase in total investment income during the quarter ended March 31, 2024 as compared to the quarter ended December 31, 2023.

 

 

 

PORTFOLIO AND INVESTMENT ACTIVITY1

 

A summary of the Company's investment activity for the three months ended March 31, 2024 is as follows:

 

   New Investment
Commitments		   Sales and Repayments 
Investment Type (in thousands)  Amount   Percentage
of Total		   Amount   Percentage
of Total		 
Senior secured first lien debt  $115,453    92%  $195,541    94%
Senior secured second lien debt   —    —    5    — 
Collateralized securities and structured products - equity   —    —    64    — 
Unsecured debt   1,096    1%   8,872    4%
Equity   8,645    7%   2,760    2%
  Total  $125,194    100%  $207,242    100%

 

During the three months ended March 31, 2024, new investment commitments were made across 5 new and 7 existing portfolio companies. During the same period, the Company received the full repayment on investments in 7 portfolio companies. As a result, the number of portfolio companies decreased from 111 as of December 31, 2023 to 109 as of March 31, 2024.

 

PORTFOLIO SUMMARY1

 

As of March 31, 2024, the Company’s investments consisted of the following:

 

   Investments at Fair Value 
Investment Type (in thousands)  Amount  

Percentage

of Total

 
Senior secured first lien debt  $1,465,051    84.2%
Senior secured second lien debt   28,460    1.6%
Collateralized securities and structured products - equity   1,004    0.1%
Unsecured debt   5,506    0.3%
Equity   240,679    13.8%
  Total  $1,740,700    100.0%

 

 

 

The following table presents certain selected information regarding the Company’s investments:

 

   As of 
   March 31, 2024   December 31, 2023 
Number of portfolio companies   109    111 
Percentage of performing loans bearing a floating rate3   92.6%   92.5%
Percentage of performing loans bearing a fixed rate3   7.4%   7.5%
Yield on debt and other income producing investments at amortized cost4   12.93%   13.41%
Yield on performing loans at amortized cost4   13.39%   13.98%
Yield on total investments at amortized cost   11.52%   12.12%
Weighted average leverage (net debt/EBITDA)5   4.98x   5.02x
Weighted average interest coverage5   1.98x   1.93x
Median EBITDA6   $33.7 million    $33.7 million 

 

As of March 31, 2024, investments on non-accrual status represented 0.86% and 2.88% of the total investment portfolio at fair value and amortized cost, respectively. As of December 31, 2023, investments on non-accrual status represented 0.89% and 3.47% of the total investment portfolio at fair value and amortized cost, respectively.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of March 31, 2024, the Company had $1.07 billion of total principal amount of debt outstanding, comprised of $650 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 8.4% for the quarter ended March 31, 2024. As of March 31, 2024, the Company had $179 million in cash and short-term investments and $175 million available under its financing arrangements.2

 

EARNINGS CONFERENCE CALL

 

CION will host an earnings conference call on Thursday, May 9, 2024 at 11:00 am Eastern Time to discuss its financial results for the first quarter ended March 31, 2024. 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 First 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

 

1)The discussion of the investment portfolio excludes short-term investments.

 

2)Total debt outstanding excludes netting of debt issuance costs of $9.4 million and $10.6 million as of March 31, 2024 and December 31, 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)

 

   March 31, 2024   December 31, 2023 
   (unaudited)     
Assets 
Investments, at fair value:          
     Non-controlled, non-affiliated investments (amortized cost of $1,541,138 and $1,610,822, respectively)  $1,494,478   $1,570,676 
     Non-controlled, affiliated investments (amortized cost of $212,966 and $210,103, respectively)   202,915    206,301 
     Controlled investments (amortized cost of $154,505 and $154,705, respectively)   173,444    177,293 
          Total investments, at fair value (amortized cost of $1,908,609 and $1,975,630, respectively)   1,870,837    1,954,270 
Cash   48,482    8,415 
Interest receivable on investments   36,366    36,724 
Receivable due on investments sold and repaid   11,452    967 
Prepaid expenses and other assets   1,137    1,348 
   Total assets  $1,968,274   $2,001,724 
           
Liabilities and Shareholders' Equity 
Liabilities          
Financing arrangements (net of unamortized debt issuance costs of $9,388 and $10,643, respectively)  $1,060,455   $1,081,701 
Payable for investments purchased   21,041    4,692 
Accounts payable and accrued expenses   743    1,036 
Interest payable   8,556    10,231 
Accrued management fees   6,864    6,893 
Accrued subordinated incentive fee on income   6,914    4,615 
Accrued administrative services expense   642    2,156 
Shareholder distribution payable   —    10,837 
  Total liabilities   1,105,215    1,122,161 
           
Shareholders' Equity          
Common stock, $0.001 par value; 500,000,000 shares authorized; 53,760,605 and 54,184,636 shares issued, and 53,760,605 and 54,184,636 shares outstanding, respectively   54    54 
Capital in excess of par value   1,028,360    1,033,030 
Accumulated distributable losses   (165,355)   (153,521)
  Total shareholders' equity   863,059    879,563 
Total liabilities and shareholders' equity  $1,968,274   $2,001,724 
Net asset value per share of common stock at end of period  $16.05   $16.23 

 

 

 

CĪON Investment Corporation

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

 

   Three Months Ended 
   March 31, 2024   December 31, 2023 
   (unaudited)   (unaudited) 
Investment income          
Non-controlled, non-affiliated investments          
     Interest income  $55,372   $43,096 
     Paid-in-kind interest income   7,049    6,581 
     Fee income   3,873    3,127 
     Dividend income   —    128 
Non-controlled, affiliated investments          
     Interest income   1,519    1,519 
     Paid-in-kind interest income   2,482    2,419 
     Dividend income   27    — 
Controlled investments          
     Interest income   3,232    2,786 
     Fee income   —    341 
     Paid-in-kind interest income   —    2 
Total investment income   73,554    59,999 
Operating expenses          
Management fees   6,864    6,893 
Administrative services expense   1,092    1,228 
Subordinated incentive fee on income   6,914    4,615 
General and administrative   1,784    1,422 
Interest expense   24,302    24,023 
   Total operating expenses   40,956    38,181 
   Net investment income before taxes   32,598    21,818 
Income tax expense, including excise tax   5    60 
   Net investment income after taxes   32,593    21,758 
Realized and unrealized (losses) gains          
Net realized losses on:          
   Non-controlled, non-affiliated investments   (9,736)   (351)
   Non-controlled, affiliated investments   —    — 
   Controlled investments   —    — 
Net realized losses   (9,736)   (351)
Net change in unrealized (depreciation) appreciation on:          
   Non-controlled, non-affiliated investments   (6,517)   7,050 
   Non-controlled, affiliated investments   (6,246)   1,801 
   Controlled investments   (3,649)   20,734 
Net change in unrealized (depreciation) appreciation   (16,412)   29,585 
Net realized and unrealized (losses) gains   (26,148)   29,234 
Net increase in net assets resulting from operations  $6,445   $50,992 
Per share information—basic and diluted          
Net increase in net assets per share resulting from operations  $0.12   $0.94 
Net investment income per share  $0.60   $0.40 
Weighted average shares of common stock outstanding   53,960,698    54,292,065 

 

 

 

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 March 31, 2024. 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 May 9, 2024, 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.

 

CONTACTS

 

Media

Susan Armstrong

sarmstrong@cioninvestments.com

 

Investor Relations

Charlie Arestia

carestia@cioninvestments.com

(646) 253-8259

James Carbonara

 

Hayden IR

(646)-755-7412

James@haydenir.com