On August 8, 2024, CION Invt Corp (CION, Financial) released its 8-K filing reporting financial results for the second quarter ended June 30, 2024. CION Invt Corp is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company. The Company's portfolio is comprised of investments in senior secured debt, including first lien loans, second lien loans, and unitranche loans, and, to a lesser extent, collateralized securities, structured products, and other similar securities, unsecured debt, and equity, of private and thinly-traded U.S. middle-market companies.
Performance Overview
CION Invt Corp (CION, Financial) reported earnings per share (EPS) of $0.42 for Q2 2024, surpassing the analyst estimate of $0.39. However, the company reported total investment income of $61.4 million, falling short of the estimated $64.59 million. The decrease in total investment income from the previous quarter was primarily driven by higher investment income from origination and restructuring activities and fees received in connection with the repayment of portfolio investments during Q1 2024.
Financial Achievements and Challenges
Michael A. Reisner, co-Chief Executive Officer of CION, commented:
“I’m pleased to report that CION continues to perform well, with strong results in net investment income, NAV stability, capital deployment, and portfolio credit performance. We are focused on building a durable franchise here at CION, and believe that CION is uniquely positioned for this environment given our middle market, first lien direct lending focus paired with our opportunistic strategy as we seek to capture alpha in volatile and complex market conditions.”
Despite the positive EPS, CION faced challenges with a decrease in total investment income and operating expenses. Operating expenses for Q2 2024 were $38.4 million, down from $41.0 million in Q1 2024, primarily due to lower advisory fees resulting from the decrease in total investment income.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 |
|---|---|---|
| Total Investment Income | $61.4 million | $73.6 million |
| Total Operating Expenses | $38.4 million | $41.0 million |
| Net Investment Income | $22.96 million | $32.59 million |
| Net Realized Losses | $(20.28) million | $(9.74) million |
| Net Unrealized Gains (Losses) | $19.69 million | $(16.41) million |
| Earnings Per Share | $0.42 | $0.12 |
| Distributions Declared Per Share | $0.41 | $0.34 |
Portfolio and Investment Activity
During Q2 2024, CION made new investment commitments totaling $148.38 million, primarily in senior secured first lien debt. The company exited investments in one portfolio company via sale and wrote off all investments in four portfolio companies, resulting in a decrease in the number of portfolio companies from 109 to 107.
| Investment Type | New Commitments | Percentage of Total | Sales and Repayments | Percentage of Total |
|---|---|---|---|---|
| Senior Secured First Lien Debt | $138.62 million | 93% | $61.91 million | 81% |
| Senior Secured Second Lien Debt | - | - | $12.51 million | 16% |
| Collateralized Securities and Structured Products - Equity | - | - | $0.06 million | 0% |
| Equity | $9.76 million | 7% | $2.45 million | 3% |
Liquidity and Capital Resources
As of June 30, 2024, CION had $1.07 billion in total principal amount of debt outstanding, with a combined weighted average interest rate of 8.4%. The company had $93 million in cash and short-term investments and $175 million available under its financing arrangements.
Conclusion
CION Invt Corp (CION, Financial) demonstrated resilience in Q2 2024 with a solid EPS performance despite challenges in total investment income. The company's disciplined capital deployment and focus on middle-market, first lien direct lending positions it well for future growth. Investors and stakeholders can access the full earnings report and additional details on the company's website or through the provided 8-K filing.
Explore the complete 8-K earnings release (here) from CION Invt Corp for further details.
