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Rand Capital Corporation (NASDAQ:RAND) Q4 2023 Earnings Call Transcript

Rand Capital Corporation (NASDAQ:RAND) Q4 2023 Earnings Call Transcript March 5, 2024

Rand Capital Corporation isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings. Welcome to Rand Capital Corporation Fourth Quarter Fiscal Year 2023 Financial Results. At this time, all participants are in a listen-only mode. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to Craig Mychajluk, Investor Relations. Thank you, Craig. You may begin.

Craig Mychajluk: And good afternoon, everyone. I appreciate your interest in Rand Capital and for joining us today for our fourth quarter and full-year 2023 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 in 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 some forward-looking statements during this presentation. Statements apply to future events that are subject to risks and uncertainties with other factors that could cause actual results to differ from where we are today.

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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.

A street-level view of a large financial firm, symbolizing the strength of the company's investments.

Daniel Penberthy: Thank you, Craig, and good afternoon, everyone. We have delivered another strong year of results as we continue to scale the business through the successful execution of our investment strategy previously discussed. We entered the 2023 with a strong and flexible balance sheet that was supported by multiple sources of capital. During the year, we monetized some equity investments, exited some of our publicly traded securities and had loan repayments that provided approximately $10 million of cash proceeds. In addition, we drew down over $13 million from our credit facility. In total, we have put more than $20 million of available cash to work during 2023, primarily in income-producing investments. Our debt portfolio now makes up 64% of the total, and this compares with 56% at the end of 2022.

This has resulted in an improved portfolio yield and drove total investment income growth of 11% for the quarter and 27% for the full-year period. This strong performance enabled us to increase our return to shareholders as highlighted on Slide 4. During 2023, we paid total dividends of $1.33 per share, which included a $0.38 per share special dividend that was paid in the fourth quarter. Our aggregate total dividends represented an increase of 60% over our 2022 dividends paid and 3x growth over 2021. I would like to also highlight that during the second quarter of 2023, we had raised our regularly quarterly cash dividend by 20% or $0.05 per share. We've recently announced our first quarter 2024 dividend will be at the same $0.25 per share amount.

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To continue reading the Q&A session, please click here.