Horizon Technology Finance Corporation (NASDAQ:HRZN) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 09:00 am ET


Horizon Technology Finance Corporation (NASDAQ:HRZN) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings, and welcome to Horizon Technology Finance Corporation Second Quarter 2020 Earnings Call. [Operator Instructions]

It is now my pleasure to introduce your host, Megan Bacon of Horizon. Thank you. You may begin.

Megan N. Bacon

Thank you, and welcome to the Horizon Technology Finance Second Quarter 2020 Conference Call. Representing the company today are Rob Pomeroy, Chairman and Chief Executive Officer; Jerry Michaud, President; and Dan Trolio, Chief Financial Officer. I would like to point out that the Q2 earnings press release and Form 10-Q are available on the company's website at horizontechfinance.com.

Before we begin our formal remarks, I need to remind everyone that during this conference call, Horizon Technology Finance will make certain forward-looking statements, including statements with regard to the future performance of the company. Words such as believes, expects, anticipates, intends, or similar expressions are used to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions.

Certain factors could cause actual results to differ on a material basis from those projected in these forward-looking statements, and some of these factors are detailed in the risk factor discussion in the company's filings with the Securities and Exchange Commission, including the company's Form 10-K for the year ended December 31, 2019. The company undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

At this time, I would like to turn the call over to Rob Pomeroy.

Robert D. Pomeroy, Jr.

Good morning. Thank you for joining us and for your continued interest in Horizon. We hope you and your families remain safe and healthy. As we normally do, I will provide some overall perspective on the company. Jerry will then touch on our business development efforts and the market environment; and Dan will detail our operating performance and financial condition.

The last few months have been extremely challenging times for all Americans. At Horizon, we have been hard at work since the beginning of the pandemic, closely managing our portfolio and building on our recent accomplishments to further strengthen our overall financial and credit position. Our efforts in constructing and managing our portfolio, including execution on our predictive pricing strategy produced second quarter results of which we are all proud.

During the quarter, we generated net investment income of $0.40 per share, which exceeded our distributions due to our strong onboarding yields, our predictive pricing strategy resulting in significant prepayment activity and our successful efforts to recover value from our underperforming loans. We grew the size of our debt portfolio for the ninth consecutive quarter. We achieved a debt investment portfolio yield of 16.9%. We maintained a stable credit profile despite the ongoing volatility in the market. We increased our net asset value as of June 30 to $11.64, up $0.16 from March 31. Considering the significant persistent economic effects of COVID-19, we're very pleased our NAV increased this quarter.

We also further strengthened and diversified our balance sheet by amending our credit facilities