NASDAQ:CGBD Carlyle Secured Lending Q1 2023 Earnings Report $14.78 +0.19 (+1.30%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$14.78 0.00 (-0.03%) As of 04/25/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Carlyle Secured Lending EPS ResultsActual EPS$0.50Consensus EPS $0.49Beat/MissBeat by +$0.01One Year Ago EPSN/ACarlyle Secured Lending Revenue ResultsActual Revenue$41.60 millionExpected Revenue$42.02 millionBeat/MissMissed by -$420.00 thousandYoY Revenue GrowthN/ACarlyle Secured Lending Announcement DetailsQuarterQ1 2023Date5/9/2023TimeN/AConference Call DateWednesday, May 10, 2023Conference Call Time10:00AM ETUpcoming EarningsCarlyle Secured Lending's Q1 2025 earnings is scheduled for Tuesday, May 6, 2025, with a conference call scheduled on Wednesday, May 7, 2025 at 11:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Carlyle Secured Lending Q1 2023 Earnings Call TranscriptProvided by QuartrMay 10, 2023 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:00Good day Speaker 100:00:00and thank you for standing by. Welcome to the Carlyle Secured Lending First Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised today's conference is being recorded. Speaker 100:00:18And I would like to hand it to your speaker today, Daniel Hahn. Please go ahead. Speaker 200:00:26Good morning, and welcome to Carlyle Secured Lightning's Q1 2023 earnings call. With me on the call this morning is Aaron Nihong, our Chief Executive Officer and Tom Hennigan, our Chief Financial Officer. Last night, we filed our Form 10 Q and issued a press release with a presentation of our results, which are available on the Investor Relations section of our website. Following our remarks today, we will hold a question and answer session for analysts and institutional investors. This call is being webcast and a replay will be available on our website. Speaker 200:00:59Any forward looking statements made today do not guarantee future performance and any undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our Annual Report on Form 10 ks. These risks and uncertainties could cause actual results to differ materially from those indicated. Carlyle Secured Lending assumes no obligation to update any forward looking statements at any time. With that, I'll turn the call over to Aaron. Speaker 300:01:30Thanks, Dan. Good morning, everyone, and thank you all for joining. I will focus my remarks on 3 topics for today's call. I'll start with an overview of our Q1 results. Next, I'll touch on the current market environment. Speaker 300:01:45And finally, I'll conclude with a few thoughts on our investment activity and current positioning. Starting off with earnings, The Q1 was another strong quarter as the portfolio continued to benefit from higher base rates and attractive pricing on new investments. We generated total net investment income of $0.50 per share in Q1, which represented an increase of 25% versus our prior period core earnings and resulted in dividend coverage of 136%. We declared total Q2 dividends of $0.44 consisting of our base dividend of $0.37 which is in line with our Q1 base plus a $0.07 supplemental. As Tom will detail later, our net asset value increased from prior quarter to $17.09 per share, primarily driven by our Q1 earnings outpacing our dividend. Speaker 300:02:40Turning now to the current investment environment. The terms and pricing available to us today continue to be lender friendly. Recent deal activity indicates a potential recovery broadly syndicated in high yield markets, Though even with those green shoots sprouting, sponsors have continued to turn to private credit as the preferred financing source for the majority of LBO transactions. From a macro perspective, bank stress initially increased volatility in Q1, but the knock on effects of those events were limited. Despite the Federal Reserve's best efforts, inflation remains persistent with companies continuing to pass through price increases to the consumer. Speaker 300:03:22As a general note on our portfolio, over the last 18 months, we've seen stability in the credit quality of our book. The majority of our companies have been able to appropriately adapt to the current inflationary environment and we pay close attention to any companies We think we may have a difficult time passing through cost inflation to customers in the long run. While Q1 is traditionally a seasonally slow quarter for deal activity, Border market volatility weighed further on M and A activity at the beginning of 2023 and led to an even slower quarter for capital formation. With this as the backdrop, we remain disciplined and focused on deploying primarily first lien capital at highly attractive yields. In line with the broader market, new originations were down, but despite this, we remained highly selective. Speaker 300:04:14The weighted average yield at cost of these transactions was higher than the new fundings in the 4th quarter. Additionally, Newly funded investments had more attractive economics than 1st quarter repayments. We ended Q1 with approximately $2,000,000,000 in investments at fair value. Lastly, I'd like to spend a few minutes on our current portfolio positioning. While this was my Q1 of leading the business, Our strategy remains consistent. Speaker 300:04:43We are focused on primarily making investments to U. S. Companies backed by high quality sponsors in the middle market. The median EBITDA across our core portfolio at the end of the Q1 was $73,000,000 Supplementing our core portfolio, we leveraged the sourcing capabilities of complementary lending strategies within the broader Carlyle network and capitalize on significant global resources that the firm has to offer to help us manage our risk. Our approach allows us to remain focused on disciplined underwriting, prudent portfolio construction and conservative risk management. Speaker 300:05:22Our portfolio remains highly diversified and is comprised of over 170 investments in more than 130 companies Across over 25 industries, the average exposure to any single portfolio company is less than 1% and 95% of our investments are in senior So we feel very well positioned in the current environment. I'll now hand the call over to our CFO, Tom Hennigan. Operator00:05:49Thank you, Aaron. Today, I'll begin with a review of our Q1 earnings. Then I'll discuss portfolio performance And I'll conclude with detail on our balance sheet positioning. As Aaron previewed, we had another strong quarter on the earnings front. Total investment income for the Q1 was $58,000,000 up 4% from the prior quarter. Operator00:06:11This increase was primarily driven by higher benchmark rates. Total expenses increased in the quarter from $31,000,000 to $33,000,000 Similar to last quarter, this was primarily due to higher interest expense from rising base rates. The result was total net investment income for the Q1 of $26,000,000 or $0.50 per share, up 4% versus $0.48 per share in Q4. This recent level of earnings is materially above our quarterly core earnings from earlier in 2022, which range from $0.40 to $0.44 per share. Our Board of Directors declared the dividends for the Q2 of 2023 at a total level of $0.44 per share. Operator00:06:54That's comprised of the $0.37 base dividend plus the $0.07 supplemental, which is payable to shareholders of record as of the close of business on June 30. This total dividend level of $0.44 allows us to build NAV in the face of an increasingly complex macroeconomic environment. At the same time, it also represents an attractive yield of over 10% on NAV and over 12% on the latest share price, which we view as a very healthy level. In terms of the forward outlook for earnings, we still see some potential for modest upside in NII compared to Q1 levels based on the combination of higher benchmark rates and attractive economics on new investments. So we remain highly confident in our ability to comfortably meet and exceed our 0.37 Our total aggregate realized and unrealized net gain was about $1,000,000 for the quarter. Operator00:07:52This increase was primarily driven by unrealized gains from tightening market spreads, combined with the mixed results for individual credits. While we continue to see overall stability in credit quality across the book, We are actively monitoring each of our investments to identify any early signs of deterioration. The total fair value of transactions risk rate is 3 to 5, Indicating some level of downgrade since we made the investment was up modestly this quarter. Total non accruals increased from 2.9% to 3.5% based on fair value due to the addition of American Physician Partners. Aaron noted that most of our portfolio companies have reacted well to the inflationary environment. Operator00:08:32The exception has been a couple of our healthcare services book, namely American Physician and ProPT, where labor shortages and wage inflation have persisted. And the structural nature of the businesses It's difficult for those management teams to pass along these cost increases. Despite underperformance in these two names, we continue to see financial performance improvement and positive valuation migration in investments like Direct Travel and Dermatology Associates. I'll finish by touching on our financing facilities and leverage. We continue to be well positioned on the right side of our balance sheet. Operator00:09:06Statutory leverage was about 1.3x and net financial leverage ended the quarter at 1.16x. This is in line with the prior quarter and comfortably within our target range. This positioning allows us to effectively deploy capital given the attractive yields and terms available for new investments in the current market. With that, I'll turn it back to Aaron. Speaker 300:09:28Thanks, Tom. I would like to finish by reiterating that we remain highly confident in our strategy and portfolio construction and are I'd like to now hand the call over to the operator to take your questions. Thank you. Speaker 100:09:49Thank you. At this time, we will conduct a question and answer session. Please standby while we compile the Q and A roster. Please stand by while we compile the Q and A roster. One moment please. Speaker 100:10:43At this time, I would like to turn it back to the speakers for any further comments. Speaker 300:10:47Thank you so much. Everyone, we appreciate your partnership and we look forward to speaking to you in the future. Have a great day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCarlyle Secured Lending Q1 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Carlyle Secured Lending Earnings HeadlinesCarlyle Secured Lending, Inc. Schedules Earnings Release and Quarterly Earnings Call to Discuss ...April 15, 2025 | gurufocus.comCarlyle Secured Lending Rings the Opening BellApril 1, 2025 | nasdaq.comURGENT: Someone's Moving Gold Out of London...People who don’t understand the gold market are about to lose a lot of money. Unfortunately, most so-called “gold analysts” have it all wrong… They tell you to invest in gold ETFs - because the popular mining ETFs will someday catch fire and close the price gap with spot gold. April 26, 2025 | Golden Portfolio (Ad)Carlyle Secured Lending, Inc. Closes Merger with Carlyle Secured Lending IIIMarch 27, 2025 | globenewswire.comCarlyle Secured Lending, Inc. Announces Shareholder Approval of Merger with Carlyle Secured Lending IIIMarch 26, 2025 | globenewswire.comQ4 2024 Carlyle Secured Lending Inc Earnings CallFebruary 27, 2025 | finance.yahoo.comSee More Carlyle Secured Lending Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Carlyle Secured Lending? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Carlyle Secured Lending and other key companies, straight to your email. Email Address About Carlyle Secured LendingCarlyle Secured Lending (NASDAQ:CGBD) is business development company specializing in first lien debt, senior secured loans, second lien senior secured loan unsecured debt, mezzanine debt and investments in equities. It specializes in directly investing. It specializes in middle market. It targets healthcare and pharmaceutical, aerospace and defense, high tech industries, business services, software, beverage food and tobacco, hotel gamming and leisure, banking finance insurance and in real estate sector. The fund seeks to invest across United States of America, Luxembourg, Cayman Islands, Cyprus, and United Kingdom. It invests in companies with EBITDA between $25 million and $100 million.View Carlyle Secured Lending ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 4 speakers on the call. Operator00:00:00Good day Speaker 100:00:00and thank you for standing by. Welcome to the Carlyle Secured Lending First Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised today's conference is being recorded. Speaker 100:00:18And I would like to hand it to your speaker today, Daniel Hahn. Please go ahead. Speaker 200:00:26Good morning, and welcome to Carlyle Secured Lightning's Q1 2023 earnings call. With me on the call this morning is Aaron Nihong, our Chief Executive Officer and Tom Hennigan, our Chief Financial Officer. Last night, we filed our Form 10 Q and issued a press release with a presentation of our results, which are available on the Investor Relations section of our website. Following our remarks today, we will hold a question and answer session for analysts and institutional investors. This call is being webcast and a replay will be available on our website. Speaker 200:00:59Any forward looking statements made today do not guarantee future performance and any undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our Annual Report on Form 10 ks. These risks and uncertainties could cause actual results to differ materially from those indicated. Carlyle Secured Lending assumes no obligation to update any forward looking statements at any time. With that, I'll turn the call over to Aaron. Speaker 300:01:30Thanks, Dan. Good morning, everyone, and thank you all for joining. I will focus my remarks on 3 topics for today's call. I'll start with an overview of our Q1 results. Next, I'll touch on the current market environment. Speaker 300:01:45And finally, I'll conclude with a few thoughts on our investment activity and current positioning. Starting off with earnings, The Q1 was another strong quarter as the portfolio continued to benefit from higher base rates and attractive pricing on new investments. We generated total net investment income of $0.50 per share in Q1, which represented an increase of 25% versus our prior period core earnings and resulted in dividend coverage of 136%. We declared total Q2 dividends of $0.44 consisting of our base dividend of $0.37 which is in line with our Q1 base plus a $0.07 supplemental. As Tom will detail later, our net asset value increased from prior quarter to $17.09 per share, primarily driven by our Q1 earnings outpacing our dividend. Speaker 300:02:40Turning now to the current investment environment. The terms and pricing available to us today continue to be lender friendly. Recent deal activity indicates a potential recovery broadly syndicated in high yield markets, Though even with those green shoots sprouting, sponsors have continued to turn to private credit as the preferred financing source for the majority of LBO transactions. From a macro perspective, bank stress initially increased volatility in Q1, but the knock on effects of those events were limited. Despite the Federal Reserve's best efforts, inflation remains persistent with companies continuing to pass through price increases to the consumer. Speaker 300:03:22As a general note on our portfolio, over the last 18 months, we've seen stability in the credit quality of our book. The majority of our companies have been able to appropriately adapt to the current inflationary environment and we pay close attention to any companies We think we may have a difficult time passing through cost inflation to customers in the long run. While Q1 is traditionally a seasonally slow quarter for deal activity, Border market volatility weighed further on M and A activity at the beginning of 2023 and led to an even slower quarter for capital formation. With this as the backdrop, we remain disciplined and focused on deploying primarily first lien capital at highly attractive yields. In line with the broader market, new originations were down, but despite this, we remained highly selective. Speaker 300:04:14The weighted average yield at cost of these transactions was higher than the new fundings in the 4th quarter. Additionally, Newly funded investments had more attractive economics than 1st quarter repayments. We ended Q1 with approximately $2,000,000,000 in investments at fair value. Lastly, I'd like to spend a few minutes on our current portfolio positioning. While this was my Q1 of leading the business, Our strategy remains consistent. Speaker 300:04:43We are focused on primarily making investments to U. S. Companies backed by high quality sponsors in the middle market. The median EBITDA across our core portfolio at the end of the Q1 was $73,000,000 Supplementing our core portfolio, we leveraged the sourcing capabilities of complementary lending strategies within the broader Carlyle network and capitalize on significant global resources that the firm has to offer to help us manage our risk. Our approach allows us to remain focused on disciplined underwriting, prudent portfolio construction and conservative risk management. Speaker 300:05:22Our portfolio remains highly diversified and is comprised of over 170 investments in more than 130 companies Across over 25 industries, the average exposure to any single portfolio company is less than 1% and 95% of our investments are in senior So we feel very well positioned in the current environment. I'll now hand the call over to our CFO, Tom Hennigan. Operator00:05:49Thank you, Aaron. Today, I'll begin with a review of our Q1 earnings. Then I'll discuss portfolio performance And I'll conclude with detail on our balance sheet positioning. As Aaron previewed, we had another strong quarter on the earnings front. Total investment income for the Q1 was $58,000,000 up 4% from the prior quarter. Operator00:06:11This increase was primarily driven by higher benchmark rates. Total expenses increased in the quarter from $31,000,000 to $33,000,000 Similar to last quarter, this was primarily due to higher interest expense from rising base rates. The result was total net investment income for the Q1 of $26,000,000 or $0.50 per share, up 4% versus $0.48 per share in Q4. This recent level of earnings is materially above our quarterly core earnings from earlier in 2022, which range from $0.40 to $0.44 per share. Our Board of Directors declared the dividends for the Q2 of 2023 at a total level of $0.44 per share. Operator00:06:54That's comprised of the $0.37 base dividend plus the $0.07 supplemental, which is payable to shareholders of record as of the close of business on June 30. This total dividend level of $0.44 allows us to build NAV in the face of an increasingly complex macroeconomic environment. At the same time, it also represents an attractive yield of over 10% on NAV and over 12% on the latest share price, which we view as a very healthy level. In terms of the forward outlook for earnings, we still see some potential for modest upside in NII compared to Q1 levels based on the combination of higher benchmark rates and attractive economics on new investments. So we remain highly confident in our ability to comfortably meet and exceed our 0.37 Our total aggregate realized and unrealized net gain was about $1,000,000 for the quarter. Operator00:07:52This increase was primarily driven by unrealized gains from tightening market spreads, combined with the mixed results for individual credits. While we continue to see overall stability in credit quality across the book, We are actively monitoring each of our investments to identify any early signs of deterioration. The total fair value of transactions risk rate is 3 to 5, Indicating some level of downgrade since we made the investment was up modestly this quarter. Total non accruals increased from 2.9% to 3.5% based on fair value due to the addition of American Physician Partners. Aaron noted that most of our portfolio companies have reacted well to the inflationary environment. Operator00:08:32The exception has been a couple of our healthcare services book, namely American Physician and ProPT, where labor shortages and wage inflation have persisted. And the structural nature of the businesses It's difficult for those management teams to pass along these cost increases. Despite underperformance in these two names, we continue to see financial performance improvement and positive valuation migration in investments like Direct Travel and Dermatology Associates. I'll finish by touching on our financing facilities and leverage. We continue to be well positioned on the right side of our balance sheet. Operator00:09:06Statutory leverage was about 1.3x and net financial leverage ended the quarter at 1.16x. This is in line with the prior quarter and comfortably within our target range. This positioning allows us to effectively deploy capital given the attractive yields and terms available for new investments in the current market. With that, I'll turn it back to Aaron. Speaker 300:09:28Thanks, Tom. I would like to finish by reiterating that we remain highly confident in our strategy and portfolio construction and are I'd like to now hand the call over to the operator to take your questions. Thank you. Speaker 100:09:49Thank you. At this time, we will conduct a question and answer session. Please standby while we compile the Q and A roster. Please stand by while we compile the Q and A roster. One moment please. Speaker 100:10:43At this time, I would like to turn it back to the speakers for any further comments. Speaker 300:10:47Thank you so much. Everyone, we appreciate your partnership and we look forward to speaking to you in the future. Have a great day.Read morePowered by