Logan Ridge Finance Corporation

Thank you. Good morning and welcome to Logan Ridge Finance Corporation's first quarter and in March 31st, 2023 earnings conference call. An earnings press release was distributed earlier yesterday after the close of market. A copy of the release along with a supplemental earnings presentation is available on the company's website at www.loganridgefinance.com. in the Investor Resources section and should be reviewed in conjunction with the company's Form 10Q filed with the SEC. As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements which are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ material from those in the forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC. Speaking on today's call will be Ted Goldthorpe, Chief Executive Officer, President and Director of Logan Ridge Finance Corporation, Jason Ruth, Chief Financial Officer, and Patrick Schaefer, Chief Investment Officer. With that, I would now like to turn the call over to Ted Goldthorpe, Chief Executive Officer of Logan Ridge Finance Corporation. Please go ahead, Ted.

Good morning, and welcome to our first quarter 2023 earnings call. As mentioned, I'm joined today by our Chief Financial Officer, Jason Ruse, and our Chief Investment Officer, Patrick Schaefer. Following my open remarks, Patrick will provide additional detail on our investment activity to date, and Jason will walk through the financials. To open, I'd like to highlight that the first quarter of 2023 was very much a continuation of the earnings trajectory established during the second half of 2022. We are continuing to execute on our strategic priorities and are cautiously optimistic for 2023, despite the challenging market we're currently navigating. With that in mind, while Patrick and Jason provide more detail shortly, I would like to highlight a few key metrics from the quarter. Our net investment income was up 69% this quarter as compared to the previous one from $0.6 million or 23 cents per share to $1.1 million or 40 cents per share. Further, the first quarter of 2023 was our third consecutive quarter of positive NII. I believe our first quarter results demonstrate the enhanced earnings power of our portfolio driven by the reworked capital structure and success we've had monetizing the non-yielding legacy portfolio, and rotating into income-generating names. Deployment for the quarter remained positive, with $7.4 million in new investments and $6.7 million in repayments and sales, leaving us with net deployment of $0.7 million. As of quarter end, the portfolio consisted of investments in 59 companies. Our improved financial performance allowed the company's board of directors to approve an increase and the quarterly dividend from 18 cents per share in the previous quarter to 22 cents per share to be paid at the end of the month. Finally, on March 23, 2023, we began repurchasing shares under the recently approved $5 million share repurchase program. As of March 31, 2023, we have repurchased 1,625 shares for an aggregate cost of approximately $34,000 which was accretive to NAV by one penny per share and demonstrates the potential benefit this program can have for Logan Ridge stockholders at the company's current trading levels. As a reminder, the program expires on March 31st, 2024. We are proud of the significant progress we've made in the turnaround story of Logan Ridge since Mount Logan Management took over as the company's investment advisor back in July of 2021. We look forward to updating you on our continued success in the coming quarters. Looking forward to the rest of 2023, we continue to believe that Logan Ridge is well positioned to capitalize on opportunities arising from the current credit environment. We will continue to focus on maximizing the earnings power of the company's balance sheet and its more efficient capital structure to further increase total returns to shareholders. Current wider spreads and a large increase in short-term interest rates make our asset class very compelling from a risk-reward perspective. With that, I will turn over the call to Patrick Schaefer, our Chief Investment Officer.

Thanks, Ted. As of March 31, 2023, the fair value of our portfolio was approximately $203.3 million and consisted of 54 portfolio companies. This compares to 59 portfolio companies with a fair value of approximately $203.6 million in the prior quarter and 42 portfolio companies with a fair value of approximately $206.9 million as of March 31, 2022. As of March 31, 2023, 54% or more than half of the company's investment portfolio at fair value was invested in assets originated by the BC Partners credit platform. During the first quarter, we continued to judiciously deploy capital. Specifically, the company made approximately $7.4 million of investments and had approximately $6.7 million in repayments and sales, resulting in net deployment of approximately $0.7 million for the quarter. As we have consistently demonstrated since taking over management, we continue to be highly disciplined as we selectively take advantage of what is shaping up to be a very lender-friendly deal environment in this volatile market. Moving on to our portfolio composition, At quarter end, our debt investment portfolio represented 83.1% of the total portfolio at fair value and had a weighted average annualized yield of approximately 10.7%, excluding income from non-accruals and collateralized loan obligations. This compares to a debt investment portfolio which represented 83.2% of our total portfolio at fair value with a weighted average annualized yield of approximately 10.4%, excluding income from non-accruals and collateralized loan obligations as of the prior quarter. As of March 31, 2023, first lien debt represented 65.4% and 67.7% of our total portfolio on a cost and fair value basis, respectively. This compares to first lien debt representing 64.9% and 67.3% of our total portfolio on a cost and fair value basis, respectively, as of the prior quarter ended December 31, 2022, and 53.7% and 48.7% of our total portfolio on a cost and fair value basis respectively as of March 31st, 2022. Further, the non-yielding equity portfolio represented 16.4% and 14.6% of the portfolio on a cost and fair value basis respectively as of March 31st, 2023. This compares to 16.3% and 14.2% of the portfolio on a cost and fair value basis as of December 31st, 2022, and 21.9% and 28.3% of the portfolio on a cost and fair value basis as of March 31st, 2022. Moving on to non-accrual status, during the quarter we moved our investment in Lucky Bucks LLC's subordinated note to non-accrual status. We have been and continue to be actively engaged with all constituents to constructively work on a pathway forward. Accordingly, as of March 31st, 2023, we had two debt investments on non-accrual with an aggregate amortized cost and fair value of $14.2 million and $10.0 million, respectively, or 6.4% and 4.9% of the investment portfolio at cost and fair value, respectively. This compares to one portfolio company on non-accrual status as of the prior quarter with a cost and fair value of $11.9 million and $9.7 million, respectively, representing 5.4% and 4.9% of the investment portfolio's cost and fair value respectively. Now I'll turn the call over to Jason.