兰德资本 (RAND) 2026财年第三季度业绩电话会议：利息收入改善，资产净值上升

要点速览

• 总投资收入为130万美元，低于2025财年第三季度的160万美元，主要是由于非应计投资的利息收入减少以及服务费收入下降。
• 投资组合公司的利息收入环比增长4%至120万美元，主要得益于2026财年上半年投放的1200万美元资金开始对业绩产生贡献。
• 净投资收入从上年同期的99.3万美元（即每股0.33美元）降至66.9万美元（即每股0.23美元），低于每股0.29美元的常规季度股息。
• 每股净资产（NAV）从6月末的17.33美元升至17.36美元。净投资收入与净投资收益之和超过了季度股息。
• 共有4项债权投资仍处于非应计状态，公允价值合计为870万美元，约占5670万美元投资组合总额的15%。
• 截至本季度末，Rand Capital的信贷额度已提款500万美元，剩余可借贷额度约为1240万美元。

关键财务数据

业务与投资组合表现

截至2026年9月30日，按公允价值计算，Rand Capital的投资组合中债权占77%，股权占23%。债务投资总额的年化加权平均收益率为8.97%，低于2025年12月31日的11.3%，反映了非应计投资头寸的影响。管理层表示，2026年进行的新投资结构化总收益率在10%至15%左右的水平。

本季度内未完成任何新投资或后续跟投。Rand Capital收到了BlackJet偿还的25万美元债务及7500美元的提前还款费，以及4 Seasons Home Care偿还的16250美元本金。

在该业务停止运营后，公司正式确认了BMP Swanson 200万美元的已实现亏损。管理层表示，这一亏损被先前已体现在NAV中的减值转回所抵消，因此该头寸本季度未产生额外的NAV影响。

估值增加的包括Bauer（70万美元）、Open Exchange（40.2万美元）和Inter-National Electronic Alloys（30万美元）。这些增值被Autotality（减少50万美元）、ITA（减少40万美元）和OnCore Golf（减少10万美元）的估值下滑所部分抵消。

前五大投资占投资组合公允价值的2450万美元（即43%）。INEA仍是最大的持仓，价值590万美元。

管理层业绩指引

管理层明确了2026年最后一个季度的三大优先事项：扩大收益创造、积极管理非应计投资，以及平衡股东分红与投资组合资金需求。

公司表示，正继续评估中下游市场的债权机会，但在时机和资本投放方面将保持选择性。管理层未提供定量财务指引，并表示无法预测受困投资组合公司产生结果的具体时机。

风险与关注领域

• 非应计投资继续限制着报告的投资组合收益率及同比利息收入。受影响的4项债权头寸约占投资组合公允价值的15%。
• 季度每股净投资收入为0.23美元，低于0.29美元的常规股息。管理层表示，将把这一差距作为年终受规管投资公司计算的一部分加以监控。
• 前五大投资占投资组合价值的43%，加大了较大持仓对收入和NAV的影响。
• 高级担保循环信贷额度将于2027年6月到期。Rand Capital表示将在到期前很久评估其选择，且在季度末符合该额度的各项契约规定。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

Operator

Greetings and welcome to Rand Capital Corporation's Third Quarter Fiscal 2026 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Craig Mychajluk. Thank you. You may begin.

Craig Mychajluk

Thank you, and good afternoon, everyone. We appreciate your interest in Rand Capital and for joining us today for our third quarter 2026 financial results conference call.

On the line with me are Dan Penberthy, our President and Chief Executive Officer; and Margaret Brechtel, our Executive Vice President and Chief Financial Officer.

A copy of the release and slides that accompany our conversation is available at randcapital.com. If you're following along with the slide deck, please turn to Slide 2, where I'd like to point out some important information.

As you are likely aware, we may make forward-looking statements during this presentation. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ from where we are today. You can find a summary of these risks and uncertainties and other factors in the earnings release and other documents filed by the company with the Securities and Exchange Commission. These documents can be found on our website or at sec.gov.

During today's call, we'll also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results in accordance with generally accepted accounting principles. We have provided reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's earnings release.

With that, please turn to Slide 3 and I'll hand the discussion over to Dan.

Daniel Penberthy

Thank you, Craig, and good afternoon, everyone. If the second quarter was about putting capital to work, the third quarter was about seeing that capital begin to show up in our results. Interest income from our portfolio companies increased 4% sequentially to $1.2 million, supported by contributions from the $12 million which we deployed in the first half of the year in new investments. That builds on what has been a relatively stable level of portfolio interest income throughout 2026.

I want to be clear about which measure I'm highlighting. Total investment income was $1.3 million and net investment income was $0.23 per share, both below the third quarter of last year, 2025. Those year-over-year comparisons still reflect lower interest income due to the loans that were placed on non-accrual over the past year. But when you look at the interest income generated by the portfolio itself, quarter-to-quarter during 2026, the trend has been steady with modest improvement in the third quarter.

For the third quarter, net asset value per share has increased to $17.36 from $17.33 at the end of June. Improved operating performance at several portfolio companies supported valuation unrealized gains. These more than offset the declines elsewhere in the portfolio. This portfolio has ended the quarter at $56.7 million across 20 companies.

And from a flexibility standpoint, we had $5 million outstanding on our credit facility and approximately $12.4 million of remaining borrowing availability at quarter end. We did not make any new or follow-on investments during the third quarter. After an active first half, we were focused on supporting these existing portfolio companies and staying patient on new opportunities. So the headline for the quarter is a stable and modestly improving income base, a small step-up in NAV per share, and a balance sheet that gives us room to act when the right opportunities emerge.

With that as a backdrop, let me turn to our dividend on Slide 4. Our regular cash dividend remains a central part of how we deliver value to shareholders. During the third quarter, we paid our regular quarterly dividend of $0.29 per share on September 9, bringing total dividends paid for the first nine months of 2026 to $0.87 per share.

As we have discussed on prior calls, we manage the dividend with a longer viewpoint. Net investment income this quarter was $0.23 per share. This is against our $0.29 regular dividend. We are mindful of that gap, and we will pay close attention to this as we do our year-end RIC calculations.

Our approach is to balance current shareholder distributions with continued portfolio development and financial flexibility. The most durable path to supporting the dividend over time is the one which we have been pursuing. That is simply growing the base of performing income-producing investments while working through our challenged portfolio companies. That naturally leads to a look at the portfolio itself. So please turn to Slide 5.

At September 30, our portfolio had a fair value of $56.7 million, up 17% from year-end 2025, reflecting the investment activity we completed earlier this year. The portfolio remains primarily debt-oriented with approximately 77% in debt and 23% in equity at fair value. That mix is by design; debt investments drive the current income that support our distributions, while selective equity positions give us participation in the upside when our portfolio companies perform well, as we have seen with prior realizations and this quarter's increase in some unrealized positions.

The annualized weighted average yield on our total debt investments was 8.97% at quarter end, which compares with 11.3% at December 31, 2025. As we have noted on prior calls, that reported yield continues to reflect the impact of non-accrual investments. At September 30, we had four portfolio debt positions on non-accrual with an aggregate fair value of $8.7 million, or about 15% of total portfolio value.

I would emphasize two points here. First, the reported yield understates the earning power of the capital we have been putting to work. Our new investments this year have been structured with total yields in the low- to mid-teens.

Second, the non-accrual positions are not passive holdings. We are actively engaged with each one of these companies and their sponsors, and our goal is to preserve and, where possible, recover value over time. We are not in a position to predict the timing of those outcomes, but they remain a direct focus for our team.

With that portfolio view in mind, Slide 6 walks through the specific portfolio activity and valuation changes during the quarter. Activity in the third quarter centered on repayments, valuation changes, and closing out one of the previously discussed holdings.

On repayments, we received a $250,000 repayment on our BlackJet debt investment, along with a prepayment fee of $7,500, as well as a $16,250 principal repayment from 4 Seasons Home Care.

Turning to BMP Swanson, which we had discussed on our last call, that company has ceased operations in the second quarter, and we wrote our investment down to zero at that time. In the third quarter, we formally recognized a $2 million realized loss on those debt and equity investments. I want to be clear about what that means.

The realized loss was accompanied by a reversal of the prior unrealized depreciation that was already on the books. In other words, it's an accounting reclassification of a loss already imputed into an NAV. Thus, we've had no change for that position in our overall NAV this quarter.

The more meaningful valuation story is shown on the bottom of the slide. We recorded valuation increases at Bauer of $700,000, Open Exchange of $402,000, Inter-National Electronic Alloys, or INEA, of $300,000. These reflect improved operating performance at those businesses. Those gains were partially offset by declines at Autotality of $500,000, ITA of $400,000, and OnCore Golf of $100,000 depreciation.

That mix is a good reflection of where we are today. A number of our companies are executing well and building value, while others are working through more challenging conditions. Our job is to stay close to both, supporting the companies that are performing and engaging early and directly where we see pressure in the portfolio.

Stepping back from the individual companies, Slide 7 shows how all of this is reflected in the portfolio's overall industry exposure. Our portfolio spans eight industries across our lower-middle-market focus. Professional and business services remains our largest area of exposure, with meaningful positions in health and wellness, distribution, manufacturing, and consumer products. The changes in weightings this quarter reflected valuation movements and repayments rather than new investment activity, which I highlighted and discussed earlier.

We don't build the portfolio around any single sector theme. Instead, we look for companies with sound structures, solid management teams, dependable cash generation and, of course, experienced sponsors willing to write a check alongside us. That company-by-company approach is ultimately what shapes the industry mix you see here.

Within that mix, a handful of positions carry the greatest weight in the portfolio value, and Slide 8 highlights this. Our top five investments, which represented $24.5 million of fair value, or 43% of the portfolio at September 30. These would include INEA, Caitec, Feature Healthcare, which operates as 4 Seasons Home Care, Highland All About People, and BMP Food Service Supply. The group is unchanged from the last quarter.

Inter-National Electronic Alloys, INEA, remains our largest holding at $5.9 million. That's also one of the companies where improved performance supported a higher valuation this quarter. Feature Healthcare, our newest top five position, continues to perform in line with our expectations following our earlier investment this year.

In a portfolio of our size, these larger positions have an outsized influence on income and value, which is why we monitor them so closely. Over time, our objective is to build more performing investments around this core, creating a broader base of income-producing assets.

With that portfolio context, I will turn over the call to Margaret to walk through this quarter's financial results in more detail. Margaret?

Margaret Brechtel

Thanks, Dan, and good afternoon, everyone. I will start on Slide 10, which summarizes our financial results for the third quarter of 2026. Total investment income was $1.3 million compared with $1.6 million in the third quarter of 2025. The decline primarily reflected lower interest income from portfolio companies due to non-accrual investments, along with lower fee income, partially offset by $28,000 of dividend and other investment income.

As Dan noted, on a sequential basis, interest income from portfolio companies increased 4% to $1.2 million, building on relatively stable levels in the first and second quarters of this year. Non-cash PIK interest was $99,000 for the quarter, or 8% of interest income from portfolio companies, compared with 43% a year ago. I would note that the lower PIK percentage primarily reflects the impact of non-accrual investments, which reduced the amount of PIK interest we recognize, so it would not be read on its own as a change in portfolio credit quality.

Total expenses were $769,000 compared with $596,000 in the third quarter of 2025. The increase reflected higher professional fees, interest expense on our credit facility borrowings and base management fees. Neither quarter included any capital gains incentive fee, so adjusted expenses, which is a non-GAAP measure, were the same as reported expenses in both periods.

Net investment income was $669,000, or $0.23 per share, compared with $993,000, or $0.33 per share, in the prior year period. Below the net investment income line, we recorded a net realized and unrealized gain on investments of $275,000 compared with a loss of $3.2 million in the third quarter of last year. As a result, the net increase in net assets from operations was $944,000, or $0.32 per share, compared with a decrease of $2.2 million, or $0.75 per share, a year ago. Those results flow directly into our net asset value, which I will walk through on Slide 11.

The waterfall on this slide summarizes the changes in net assets during the quarter. We began the quarter with net assets of approximately $51.5 million. During the period, we generated $669,000 of net investment income. We recognized a $2 million realized loss and $2.3 million of net unrealized depreciation. As Dan explained, those two figures include equal and offsetting $2 million amounts related to BMP Swanson.

Excluding that reclassification, the remaining net unrealized depreciation of roughly $275,000 reflects the underlying valuation changes across the portfolio. After $861,000 of dividends, we ended the quarter with net assets of approximately $51.5 million, and net asset value per share increased to $17.36 from $17.33. Put simply, net investment income and net investment gains together exceeded the dividends we paid during the quarter.

From there, Slide 12 shows how net asset value is composed and our available financial flexibility. On September 30, net (sic) [ total ] assets were $57.6 million, up 8% from year-end 2025. Our investment portfolio accounted for $56.7 million, or $19.10 per share. Consolidated cash was $223,000, or $0.08 per share, and other assets and liabilities net reduced net asset value by $5.4 million, or $1.82 per share, resulting in net asset value of $17.36 per share.

We ended the quarter with $5 million outstanding on our senior secured revolving credit facility, modestly lower than the end of the second quarter, and approximately $12.4 million of remaining borrowing availability, subject to the facility's borrowing base and terms. We were in compliance with our facility covenants at September 30, and the facility matures in June of 2027. We will be evaluating our options with respect to the facility well ahead of this maturity.

Taken together, we believe the balance sheet gives us the flexibility to support existing portfolio companies where appropriate and to pursue new opportunities selectively without feeling pressure to deploy capital for the sake of growth.

With the financial review covered, I'll turn the call back to Dan for closing remarks.

Daniel Penberthy

Thanks, Margaret. Please turn to Slide 13. As we head into the final quarter of 2026, our priorities fall into three areas: The first is income generation. Our goal is to build on the contributions we are seeing from this year's investments. We continue to evaluate new income-producing debt opportunities in the lower-middle market, and we'll keep the same focus on underwriting and structure that have guided previous investments. We're seeing a steady flow of opportunities, but we will remain selective about where and when we commit capital.

The second is portfolio oversight. That means actively managing our non-accrual investments, closely monitoring operating performance and the repayment across the portfolio, and pursuing opportunities to preserve and realize value. This quarter showed both sides of that at work with improving performance at several companies and continued attention on those still working through difficult conditions.

The third is capital allocation. We are balancing shareholder distributions with the needs of our portfolio, preserving capacity for both new and follow-on investments, and maintaining the financial flexibility that supports long-term net asset value.

The broader BDC and private credit environment continues to place a premium on credit quality, earnings consistency, and balance sheet strength. Investors are rightly looking past headline yields to the durability of that income behind them. That is the lens we are applying to Rand as well. When I step back and look at our progress this year, the story is better than a year-over-year comparison would suggest.

We put meaningful capital to work in the first half. The capital is now contributing to a steady and modestly improving level of portfolio interest income. Several of our companies are showing improved performance and NAV per share has moved positively this quarter. We still have work to do.

Our challenged positions, we continue to focus on them. We need to grow earnings, and we're focused on all of that to achieve results. But with a predominantly debt-oriented portfolio, available borrowing capacity and an experienced team, we believe we're well-positioned to keep building this as attractive opportunities emerge.

Thank you for your time today and, as always, your continued interest in Rand Capital. We appreciate your support, and we look forward to updating you again next quarter. Have a great day.

Operator

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.