UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: August 10, 2004
Apollo Investment Corporation
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(Exact name of registrant as specified in its charter)
Maryland 333-112591 52-2439556
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(State or other jurisdiction Commission (IRS Employer
of incorporation) File Number) Identification No.)
9 West 57th Street, 43rd Floor, New York, NY 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 212-515-3200
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(Former address: 1301 Avenue of the Americas, New York, NY 10019)
Item 12. Results of Operations and Financial Condition
The following press release was issued by Apollo Investment Corporation on
August 10, 2004:
Apollo Investment Corporation Announces June 30, 2004 Financial Results
NEW YORK--(PR Newswire)--August 10, 2004--Apollo Investment Corporation
(NASDAQ: AINV) today announced financial results for its first fiscal quarter
ended June 30, 2004. AINV commenced operations on April 8, 2004 after closing
its initial public offering of 62,000,000 shares of common stock at $15.00 per
share. After deducting underwriting discounts, commissions and offering
expenses, AINV received net proceeds of $870.15 million or $14.035 per share. At
June 30, 2004, our net asset value was $14.05 per share. The primary purpose of
the initial public offering was to obtain capital with which to invest primarily
in mezzanine loans, senior secured loans and equity investments in U.S.
middle-market companies. At June 30, 2004, we have invested approximately $243
million or 28% of our initial net proceeds consistent with our investment
objectives and business plan.
Highlights:
Stockholders' Equity: $871 million
Net Asset Value per share: $14.05
Operating Results (in thousands):
Net increase in stockholders' equity from operations: $863
Net operating loss: $1,477
Net unrealized appreciation: $2,340
Portfolio Activity:
Cost of investments made during period: $243 million
Number of portfolio companies at June 30, 2004: 12
Portfolio and Investment Activity
We completed our first quarter of operations on June 30, 2004 with our
portfolio invested 21.0% in bank debt/senior secured debt, 6.4% in corporate
notes/subordinated debt and 72.6% in cash equivalents. At June 30, 2004, the
weighted average yield of our investments (excluding cash equivalents) was
7.35%. The weighted average yield on our bank debt/senior secured debt was 6.3%
as our first lien debt averaged 5.0% and our second lien debt averaged 8.4%. The
weighted average yield of our corporate notes/subordinated debt was 10.6%.
Computed yields use interest rates as of the balance sheet date and include
amortization of loan origination fees, original issue discount and market
premium or discount, weighted by their respective costs when averaged.
Operating Results
Investment income was modest during our initial quarter of operations as it
largely reflected income generated from invested cash and cash equivalents.
Investment income totaled $3.81 million for the period with $1.63 million
attributable to cash equivalents and $2.18 million attributable to our
investments. Operating expenses for the period was $5.28 million and included
investment advisory and management fees, insurance expenses, administrative
services fees, professional fees, directors' fees and other general and
administrative expenses. It also included a non-recurring charge of
approximately $252,000 in expenses related to the organization of the Company.
The resultant net operating loss was $1.48 million. At June 30, 2004, our
portfolio had net unrealized appreciation of $2.34 million. Overall, AINV had a
net increase in stockholders' equity of $0.86 million or $0.014 per share.
Dividends to Stockholders
We are pleased to report that AINV anticipates declaring and paying its first
quarterly dividend to stockholders in September 2004. Initial dividends are
expected to be nominal and increase during the ramp-up period as investments are
made.
Conference Call at 11:00 a.m. ET on August 10, 2004
The company will host a conference call at 11:00 a.m. (ET) today to discuss
first fiscal quarter financial results. All interested parties are welcome to
participate. You can access the conference call by dialing (800) 475-2151
approximately 5-10 minutes prior to the call. International callers should dial
(212) 931-9773. All callers should reference "Apollo Investment Corporation". An
archived replay of the call will be available through August 24, 2004 by calling
(877) 519-4471. International callers please dial (973) 341-3080. For all
replay, please reference pin # 5028829.
BALANCE SHEET
(in thousands, except per share amounts)
June 30, 2004
(unaudited)
Assets
Cash $ 374
Cash equivalents, at fair value (cost - $649,033) 648,758
Investments, at fair value (cost - $242,806) 245,421
Interest receivable 1,953
Other assets 1,377
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Total assets $ 897,883
Liabilities
Payable for investments purchased $ 25,000
Management fee payable 1,446
Accrued expenses 420
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Total liabilities $ 26,866
Stockholders' Equity
Common stock, par value $.001 per share, 100,000,000 common shares authorized,
62,000,100 issued and outstanding $ 62
Paid-in capital in excess of par 870,092
Accumulated net investment loss (1,477)
Net unrealized appreciation 2,340
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Total stockholders' equity $ 871,017
Total liabilities and stockholders' equity $ 897,883
STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
For the period April 8, 2004
(commencement of operations)
through June 30,2004
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OPERATING INCOME
Interest income $ 3,805
Other income 2
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Total operating income 3,807
OPERATING EXPENSES
Management fees $ 4,013
Insurance expenses 369
General and administrative expenses 902
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Total operating expenses 5,284
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Net operating loss before investment gains and losses ($1,477)
Net unrealized appreciation 2,340
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Net increase in stockholders' equity resulting from operations $ 863
Earnings per common share 0.014
PER SHARE DATA
For the period April 8, 2004
(commencement of operations)
through June 30,2004
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Net asset value, beginning of period $ 14.06
Costs related to the initial public offering (0.03)
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Net asset value after offering costs 14.03
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Net investment loss (0.02)
Net unrealized appreciation 0.04
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Net increase in stockholders' equity resulting from operations 0.02
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Net asset value, end of period $ 14.05
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About Apollo Investment Corporation
Apollo Investment Corporation is a closed-end investment company that has
elected to be treated as a business development company under the Investment
Company Act of 1940. The Company's investment portfolio will be principally in
middle-market private companies. From time to time, the Company may also invest
in public companies that are not thinly traded. The Company expects to primarily
invest in senior secured loans and
mezzanine loans in furtherance of its business plan and may receive equity
investments in investee companies in connection with such investments. Apollo
Investment Corporation is managed by Apollo Investment Management, L.P., an
affiliate of Apollo Management, L.P., a leading private equity investor.
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve risks and uncertainties, including, but not limited to, statements as to
our future operating results; our business prospects and the prospects of our
portfolio companies; the impact of investments that we expect to make; the
dependence of our future success on the general economy and its impact on the
industries in which we invest; the ability of our portfolio companies to achieve
their objectives; our expected financings and investments; the adequacy of our
cash resources and working capital; and the timing of cash flows, if any, from
the operations of our portfolio companies.
We may use words such as "anticipates," "believes," "expects," "intends",
"will", "should," "may" and similar expressions to identify forward-looking
statements. Such statements are based on currently available operating,
financial and competitive information and are subject to various risks and
uncertainties that could cause actual results to differ materially from our
historical experience and our present expectations. Undue reliance should not be
placed on such forward-looking statements as such statements speak only as of
the date on which they are made. We do not undertake to update our
forward-looking statements unless required by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Apollo Investment Corporation
/s/ Richard Peteka
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(Signature)
Date: August 10, 2004
By: Richard Peteka
Title: Chief Financial Officer