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AINV Has OK Q3-18 - Will Have 1 To 3 Reverse Stock Split

|About: Apollo Investment (AINV)

On October 30, 2018, the Board of Directors (the “Board”) declared a distribution of $0.15 per share (or $0.45 adjusted for the one-for-three reverse stock split), payable on January 4, 2019 to shareholders of record as of December 20, 2018.

The Apollo Investment Corporation (AINV) announced on 10/30/18 that the Board has approved a one-for-three reverse stock split of the Company’s common stock which will be effective as of the close of business as of November 30, 2018 (the “Effective Time”). The Company's common stock is expected to begin trading on a split-adjusted basis at the market open on December 3, 2018.

The projections from Yahoo Finance:

Revenue Estimate Current Qtr. (Dec 2018) Next Qtr. (Mar 2019) Current Year (2019) Next Year (2020)
No. of Analysts 8 8 7 8
Avg. Estimate 65.09M 67.15M 259.94M 291.75M
Low Estimate 60.50M 62.00M 252.10M 273.08M
High Estimate 72.00M 73.00M 264.00M 311.00M
Year Ago Sales 64.75M 61.49M 259.29M 259.94M
Sales Growth (year/est) 0.50% 9.20% 0.30% 12.20%
Earnings History 12/30/2017 3/30/2018 6/29/2018 9/29/2018
EPS Est. 0.15 0.16 0.15 0.15
EPS Actual 0.16 0.15 0.15 0.15
Difference 0.01 -0.01 0 0
Surprise % 6.70% -6.30% 0.00% 0.00%
Earnings Estimate Current Qtr. (Dec 2018) Next Qtr. (Mar 2019) Current Year (2019) Next Year (2020)
No. of Analysts 12 12 12 11
Avg. Estimate 0.15 0.15 0.61 0.65
Low Estimate 0.15 0.14 0.58 0.6
High Estimate 0.16 0.16 0.63 0.72
Year Ago EPS 0.16 0.15 0.61 0.61

My spreadsheets:

Apollo Q3-18 Q2-18 Q1-18 Q4-17 Q3-17 Q2-17 Q1-2017 Q4-2016 Q3-2016 Q2-2016 Q1-2016 Q4-2015 Q3-2015 Q2-2015 Q1-2015 Q4-2014 Q3-2014 Q2-2014 Q1-2014 Q4-2013 Q3-2013 Q2-2013
Realized & Unrealized Gains -4.134 -18.298 -11.315 -28.134 -2.370 -4.539 -29.238 -25.062 1.577 -78.150 -68.015 -73.863 -51.308 -44.596 -63.800 -77.742 -23.721 11.085 20.293 54.395 26.839 -33.563
Realized & Unrealized Gains/share -$0.0193 -$0.0847 -$0.0522 -$0.1287 -$0.0108 -$0.0207 -$0.1329 -$0.1138 $0.0070 -$0.3459 -$0.2976 - $0.3190 - $0.2175 - $0.1884 - $0.2695 - $0.3284 - $0.1002 $0.0468 $0.0857 $0.2298 $0.1134 - $0.1418

Prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments which totaled $13.3 million and $13.6 million for the year ended March 31, 2018 and year ended March 31, 2017, respectively.Prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments totaled $2.8 million for the three months ended December 31, 2017.Prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments totaled $4.0 million for the three months ended September 30, 2017.

Prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments totaled $3 million for the three months ended June 30, 2017.

Apollo adjusted fee income Q3-18 Q2-18 Q1-18 Q4-17 Q3-17 Q2-17 Q1-2017 Q4-2016 Q3-2016 Q2-2016 Q1-2016 Q4-2015 Q3-2015 Q2-2015 Q1-2015 Q4-2014 Q3-2014 Q2-2014 Q1-2014 Q4-2013 Q3-2013 Q2-2013
Fee or other Income 1.810 1.403 1.285 1.487 2.647 0.823 1.568 0.936 0.349 1.769 4.425 0.747 2.898 3.538 1.134 4.596 4.395 2.362 2.691 3.396 2.255 4.514
Total Income 66.034 63.591 61.489 64.753 66.462 66.711 66.296 68.071 69.026 76.469 85.335 94.325 98.420 101.666 102.115 110.026 118.910 102.580 96.405 94.561 93.708 96.673
Fee Income % of TII 2.74% 2.21% 2.09% 2.30% 3.98% 1.23% 2.36% 1.38% 0.51% 2.31% 5.18% 0.79% 2.94% 3.48% 1.11% 4.18% 3.70% 2.30% 2.79% 3.59% 2.41% 4.67%
Prepayment + accel. OID 3.600 0.900 3.500 2.800 4.000 3.000 4.500 0.600 3.400 5.100 0.100 0.300 4.500 8.000 6.700 9.300 21.900 6.100 5.500 2.500 9.000 7.800
Pre + Fee Dollars 5.410 2.303 4.785 4.287 5.647 3.823 6.068 1.536 3.749 6.869 4.525 1.047 7.398 11.538 7.834 13.896 26.295 8.462 8.191 5.896 11.255 12.314
Pre + Fee % of TII 8.19% 3.62% 7.78% 6.62% 8.50% 5.73% 9.15% 2.26% 5.43% 8.98% 5.30% 1.11% 7.89% 11.35% 7.67% 12.63% 22.11% 8.25% 8.66% 6.23% 12.01% 12.74%

Apollo Q3-18 Q2-18 Q1-18 Q4-17 Q3-17 Q2-17 Q1-17 Q4-2016 Q3-16 Q2-16 Q1-16 Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14
Debt 957.016 1,102.679 789.846 875.165 864.906 920.674 848.449 1,003.958 1,014.794 1,098.977 1,327.610 1,384.719 1,370.163 1,390.890 1,498.759 1,588.653 1,557.472 1,571.018 1,372.261
Debt/share 4.4700 5.1070 3.6449 4.0044 3.9400 4.1907 3.8580 4.5599 4.5337 4.8640 5.8101 5.9805 5.8089 5.8752 6.3308 6.7105 6.5788 6.6360 5.7965
Debt/share to NAV 69.09% 78.93% 55.56% 60.67% 58.63% 62.27% 57.24% 66.47% 65.23% 70.49% 79.81% 79.11% 74.19% 73.34% 77.39% 79.60% 75.44% 75.93% 66.86%
Interest expense 14.903 13.576 12.560 12.433 13.832 14.215 14.061 14.473 14.438 16.793 17.315 19.335 21.764 22.436 21.166 20.315 18.946 18.902 17.965
Interest expense/share 0.0700 0.0629 0.0580 0.0569 0.0630 0.0647 0.0639 0.0657 0.0645 0.0743 0.0758 0.0835 0.0923 0.0948 0.0894 0.0858 0.0800 0.0798 0.0759
Interest expense/TII 22.57% 21.35% 20.43% 19.20% 20.81% 21.31% 21.21% 21.26% 20.92% 21.96% 20.29% 20.50% 22.11% 22.07% 20.67% 18.46% 15.93% 18.43% 19.00%
Annualized Int exp/Debt 6.23% 4.92% 6.36% 5.68% 6.40% 6.17% 6.63% 5.77% 5.69% 6.11% 5.22% 5.59% 6.35% 6.45% 5.65% 5.12% 4.87% 4.81% 5.24%
PWAY - Int exp/Debt 447 bps 578 bps 434 bps 482 bps 390 bps 413 bps 367 bps 513 bps 531 bps 489 bps 578 bps 581 bps 525 bps 505 bps 555 bps 598 bps 613 bps 629 bps 586 bps
Apollo Q3-18 Q2-18 Q1-18 Q4-17 Q3-17 Q2-17 Q1-2017 Q4-2016 Q3-2016 Q2-2016 Q1-2016 Q4-2015 Q3-2015 Q2-2015 Q1-2015 Q4-2014 Q3-2014 Q2-2014 Q1-2014 Q4-2013
Total investment income 66.034 63.591 61.489 64.753 66.462 66.711 66.296 68.071 69.026 76.469 85.335 94.325 98.420 101.666 102.115 110.026 118.910 102.580 94.561 94.561
Net investment income 32.163 31.548 31.942 33.967 34.157 33.320 37.290 36.352 39.537 36.064 44.618 48.091 49.561 50.986 52.071 56.662 65.688 53.201 49.683 49.683
Investments @ fair value 2.324 2.495 2.248 2.353 2.360 2.417 2.317 2.526 2.549 2.618 2.917 3.069 3.194 3.314 3.350 3.514 3.665 3.645 3.479 3.184
Wt Av Share Count 214.099 215.915 216.701 218.550 219.520 219.695 219.932* 220.169 223.835 225.941 228.5* 231.537 235.873 236.741 236.741 236.741 236.741 236.741 236.741 224.741
TII/share $0.3084 $0.2945 $0.2838 $0.2963 $0.3028 $0.3036 $0.3014 $0.3092 $0.3084 $0.3384 $0.3734 $0.4074 $0.4173 $0.4294 $0.4313 $0.4647 $0.5023 $0.4333 $0.3994 $0.4207
NII/share $0.1502 $0.1461 $0.1474 $0.1554 $0.1556 $0.1517 $0.1696 $0.1651 $0.1766 $0.1596 $0.1953 $0.2077 $0.2101 $0.2154 $0.2199 $0.2393 $0.2775 $0.2247 $0.2097 $0.2211
Dividend/share $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20 $0.20
Fee Waiver 1.834 1.856 4.641 4.986 5.081 5.009 4.969 5.246 5.302 5.717 5.203 4.999 4.722 4.515 3.681 3.740 4.041 4.152 3.417 3.375
Waiver/share $0.0086 $0.0086 $0.0214 $0.0228 $0.0231 $0.0228 $0.0226 $0.0238 $0.0237 $0.0253 $0.0228 $0.0216 $0.0200 $0.0191 $0.0155 $0.0158 $0.0171 $0.0175 $0.0144 $0.0150
NAV/share $6.47 $6.47 $6.56 $6.60 $6.72 $6.73 $6.74 $6.86 $6.95 $6.90 $7.28 $7.56 $7.83 $8.01 $8.18 $8.43 $8.72 $8.74 $8.67 $8.57
Wt Av Yield of debt 10.7% 10.7% 10.7% 10.5% 10.3% 10.3% 10.3% 10.9% 11.0% 11.0% 11.0% 11.4% 11.6% 11.5% 11.2% 11.1% 11.0% 11.1% 11.1% 11.4%
Nonaccrual @ Fair Value 2.6% 2.3% 2.3% 1.5% 1.3% 1.1% 3.0% 2.6% 3.9% 4.5% 4.2% 2.5% 2.2% 0.4% 0.1% 0.3% 0.4% 0.4%
Nonaccrual @ Cost 3.2% 3.0% 3.3% 2.4% 1.9% 1.9% 7.0% 8.2% 11.1% 11.8% 8.4% 6.0% 4.7% 2.5% 1.3% 1.0% 0.9% 1.0%
Port Company Leverage 5.5x 5.6x 5.5x 5.5x 5.5x 5.5x 5.5x 5.7x 5.5x 5.4x 5.4x 5.5x 5.7x 5.6x 5.6x 5.8x 5.4x 5.4x
Port Company Int Coverage 2.4x 2.4x 2.5x 2.7x 2.7x 2.7x 2.5x 2.5x 2.6x 2.8x 2.7x 2.7x 2.9x 2.9x 2.6x 2.5x 2.5x 2.3x
Portfolio % in Structured Products 3.0% 3.0% 3.0% 4.0% 5.2% 6% 7.2% 9.0% 12.0% 12.0% 11.0% 11.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 6.0% 7.0%
Portfolio % in Oil & Gas Loans 7.8% 7.3% 8.2% 7.3% 6.9% 6.6% 6.6% 9.4% 9.7% 11.6% 11.9% 12.9% 15.0% 16.0% 13.9% 13.6% 13.2% 13.1% 11.8% 12.9%
PIK income Capitalized 2.106 1.983 1.986 2.129 7.726 2.775 10.603 1.639 17.594 3.553 (8.265) 12.358 21.147 15.596 5.359 8.619 5.513 11.545
PIK income "earned" 2.283 2.678 2.687 5.775 5.970 5.810 7.020 8.600 6.180 6.364 14.931 10.238 6.832 8.077 12.370 7.097 7.798 6.827
Port Co Net Leverage 5.5x 5.6x 5.5x 5.44x 5.48x 5.44x 5.50x 5.62x 5.4x 5.5x 5.49x 5.49x 5.8x 5.4x 5.4x 5.4x
Port Co Interest Coverage Ratio 2.4x 2.4x 2.5x 2.68x 2.73x 2.67x 2.50x 2.42x 2.5x 2.5x 2.52x 2.52x 2.5x 2.5x 2.3x 2.3x
Non-accrual Investment $ at cost 74,671 75,671 75,671 57,928 46,199 46,430 183,141 236,453 312,955 339,970 259,166 194,358 157,044 83,736 43,959 34,549 34,549 34,549
Non-accrual @ cost % of Investments 3.2% 3.0% 3.3% 2.4% 1.9% 1.9% 7.0% 8.2% 11.1% 11.8% 8.4% 6.0% 4.7% 2.5% 1.3% 1.0% 0.9% 1.0%
Non-accrual @ fair % of Investments 2.6% 2.3% 2.3% 1.5% 1.3% 1.1% 3.0% 2.6% 3.9% 4.5% 4.2% 2.5% 2.2% 0.4% 0.1% 0.3% 0.4% 0.4%
* I did not find the Q1-16 weighted average share count. I averaged the ending count from Q1 with the average count from Q4

The good news - NAV did not shrink - which is relatively good news. NII did cover the dividend before rounding - which is relatively good news. Prepayment fees + OID discount + other fee income rose - raising TII. PIK income stayed relatively low - thus the PIK/TII was small. The amount of the fee waiver needed was small. But . . . the Bad News - the non-accrual percentage rose. Debt fell while the interest expense rose. The razor thin dividend coverage means the payout ratio is too high - and the dividend needs to be cut - again.

Disclosure: I am/we are long AINV.