FS KKR Capital Corp. Announces First Quarter 2025 Results
PR Newswire
PHILADELPHIA and NEW YORK, May 7, 2025
Declares Second Quarter 2025 Distribution of $0.70 per share
PHILADELPHIA and NEW YORK, May 7, 2025 /PRNewswire/ -- FS KKR Capital Corp. (NYSE: FSK), or the Company, today announced its financial and operating results for the quarter ended March 31, 2025, and that its board of directors has declared a second quarter 2025 distribution of $0.70 per share.
Financial and Operating Highlights for the Quarter Ended March 31, 2025(1)
-- Net investment income of $0.67 per share, compared to $0.61 per share for
the quarter ended December 31, 2024
-- Adjusted net investment income(2) of $0.65 per share, compared to
$0.66 per share for the quarter ended December 31, 2024
-- Net asset value of $23.37 per share, compared to $23.64 per share as of
December 31, 2024
-- Total net realized and unrealized loss of $0.24 per share, compared to a
total net realized and unrealized loss of $0.09 per share for the quarter
ended December 31, 2024
-- Adjusted net realized and unrealized loss(2) of $0.22 per share,
compared to adjusted net realized and unrealized loss of $0.07 per
share for the quarter ended December 31, 2024
-- Earnings per Share of $0.43, compared to Earnings per Share of $0.52 for
the quarter ended December 31, 2024
-- Total purchases of $1,998 million versus $1,407 million of sales and
repayments, including $290 of sales to the Company's joint venture Credit
Opportunities Partners JV, LLC
-- Net debt to equity ratio(3) as of March 31, 2025 was 114%, compared to
104% as of December 31, 2024
-- Paid distributions to stockholders totaling $0.70 per share(4)
"We are pleased to deliver a strong start to the year, generating $0.65 per share of Adjusted Net Investment Income and originating approximately $2.0 billion of new investments," said Michael C. Forman, Chief Executive Officer & Chairman. "Our strategy of building spillover income during prior periods of elevated interest rates supports the continued stability of our $0.64 base and $0.06 supplemental quarterly distributions amid the current market volatility."
Declaration of Distribution for Second Quarter 2025
On May 5, 2025, FSK's board of directors declared a distribution for the second quarter of $0.70 per share, consisting of a base distribution of $0.64 per share and a supplemental distribution of $0.06 per share, which will be paid on or about July 2, 2025 to stockholders of record as of the close of business on June 18, 2025.
Portfolio Highlights as of March 31, 2025
-- Total fair value of investments was $14.1 billion of which 63.3% was
invested in senior secured securities.
-- Weighted average annual yield on accruing debt investments(5) was 11.0%,
compared to 11.3% as of December 31, 2024. Excluding the impact of merger
accounting, weighted average annual yield on accruing debt investments
was 10.8%, compared to 11.0% as of December 31, 2024.
-- Weighted average annual yield on all debt investments(5) was 10.4%,
compared to 10.7% as of December 31, 2024. Excluding the impact of merger
accounting, weighted average annual yield on all debt investments was
10.2%, compared to 10.4% as of December 31, 2024.
-- Exposure to the top ten largest portfolio companies by fair value was 20%,
compared to 21% as of December 31, 2024.
-- As of March 31, 2025, investments on non-accrual status represented 2.1%
and 3.5% of the total investment portfolio at fair value and amortized
cost, respectively, compared to 2.2% and 3.7% as of December 31, 2024.
Portfolio Data As of March 31, 2025 As of December 31, 2024
------------------------------- -------------------- -----------------------
Total fair value of investments $14,122 $13,490
Asset Class (based on fair
value)
Senior Secured Loans -- First
Lien 58.1 % 57.8 %
Senior Secured Loans --
Second Lien 4.8 % 5.1 %
Other Senior Secured Debt 0.4 % 0.9 %
Subordinated Debt 1.7 % 1.7 %
Asset Based Finance 15.4 % 15.6 %
Credit Opportunities Partners
JV, LLC 11.8 % 10.1 %
Equity/Other 7.8 % 8.8 %
Interest Rate Type (based on
fair value)
% Variable Rate Debt
Investments 67.2 % 65.8 %
% Fixed Rate Debt Investments 8.2 % 9.5 %
% Other Income Producing
Investments 17.3 % 16.4 %
% Non-Income Producing
Investments(7) 5.2 % 6.1 %
% of Investments on
Non-Accrual(6) 2.1 % 2.2 %
Leverage and Liquidity as of March 31, 2025
-- Net debt to equity ratio(3) of 114%, based on $8.0 billion in total debt
outstanding, $472 million of cash, cash equivalents and foreign currency
and $62 million of net receivable for investments sold and repaid and
stockholders' equity of $6.5 billion. FSK's weighted average effective
interest rate (including the effect of non-usage fees) was 5.48%.
-- Cash, cash equivalents and foreign currency of $472 million and
availability under the Company's financing arrangements of $2.6 billion,
subject to borrowing base and other limitations.
-- As of March 31, 2025, 54% of the Company's $8.0 billion of total debt
outstanding was in unsecured debt and 46% in secured debt.
Conference Call Information
FSK will host its first quarter 2025 results conference call via live webcast on Thursday, May 8, 2025 at 9:00 a.m. (Eastern Time). All interested parties are welcome to participate and can access the live webcast from the Investor Relations section of FSK's website at www.fskkradvisor.com under Events or through the following URL: https://edge.media-server.com/mmc/p/isyxsvi2.
Research analysts who wish to participate in the conference call are requested to register a day in advance or at a minimum 15 minutes before the start of the call using the following URL: https://register.vevent.com/register/BI88609fffb868418db921e13cda59543e. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique PIN number that can be used to access the call.
An investor presentation of financial information will be available by visiting the Investor Relations section of FSK's website, under Presentations after the market close on Wednesday, May 7, 2025.
A replay of the call will be available beginning shortly after the end of the call by visiting the Investor Relations section of FSK's website, under Events.
Supplemental Information
An investor presentation of financial information will be available by visiting the Investor Relations section of FSK's website at www.fskkradvisor.com, under Presentations, after the market close on Wednesday, May 7, 2025.
About FS KKR Capital Corp.
FSK is a leading publicly traded business development company $(BDC)$ focused on providing customized credit solutions to private middle market U.S. companies. FSK seeks to invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market companies. FSK is advised by FS/KKR Advisor, LLC. For more information, please visit www.fskkradvisor.com.
About FS/KKR Advisor, LLC
FS/KKR Advisor, LLC (FS/KKR) is a partnership between FS Investments and KKR Credit that serves as the investment adviser to FSK and other business development companies.
FS Investments is a global alternative asset manager dedicated to delivering superior performance and innovative investment and capital solutions. The firm manages over $83 billion in assets for a wide range of clients, including institutional investors, financial professionals and individual investors. FS Investments provides access to a broad suite of alternative asset classes and strategies through its best-in-class investment teams and partners. With its diversified platform and flexible capital solutions, the firm is a valued partner to general partners, asset owners and portfolio companies. FS Investments is grounded in its high-performance culture and guided by its commitment to building value for its clients, investing in its colleagues and giving back to its communities. The firm has more than 500 employees across offices in the U.S., Europe and Asia and is headquartered in Philadelphia.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. $(KKR)$, please visit KKR's website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group's website at www.globalatlantic.com.
Forward-Looking Statements and Important Disclosure Notice
This announcement may contain certain forward-looking statements, including statements with regard to future events or future performance or operations of FSK. Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, risks associated with possible disruption in FSK's operations or the economy generally due to terrorism, geo-political risks, natural disasters or pandemics, future changes in laws or regulations and conditions in FSK's operating area and the price at which shares of FSK's common stock trade on the New York Stock Exchange. Some of these factors are enumerated in the filings FSK makes with the SEC. FSK undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The press release above contains summaries of certain financial and statistical information about FSK. The information contained in this press release is summary information that is intended to be considered in the context of FSK's SEC filings and other public announcements that FSK may make, by press release or otherwise, from time to time. FSK undertakes no duty or obligation to update or revise the information contained in this press release. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSK, or information about the market, as indicative of FSK's future results.
Other Information
The information in this press release is summary information only and should be read in conjunction with FSK's quarterly report on Form 10-Q for the quarter ended March 31, 2025, which FSK filed with the U.S. Securities and Exchange Commission (the SEC) on May 7(th) , 2025, as well as FSK's other reports filed with the SEC. A copy of FSK's quarterly report on Form 10-Q for the quarter ended March 31, 2025 and FSK's other reports filed with the SEC can be found on FSK's website at www.fskkradvisor.com and the SEC's website at www.sec.gov.
Certain Information About Distributions
The determination of the tax attributes of FSK's distributions is made annually as of the end of its fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination as to the tax attributes of the distributions made on a quarterly basis may not be representative of the actual tax attributes for a full year. FSK intends to update stockholders quarterly with an estimated percentage of its distributions that resulted from taxable ordinary income. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.
The timing and amount of any future distributions on FSK's shares of common stock are subject to applicable legal restrictions and the sole discretion of its board of directors. There can be no assurance as to the amount or timing of any such future distributions.
FSK may fund its distributions to stockholders from any sources of funds legally available to it, including net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies, proceeds from the sale of shares of FSK's common stock and borrowings. FSK has not established limits on the amount of funds it may use from available sources to make distributions. There can be no assurance that FSK will be able to pay distributions at a specific rate or at all.
Contact Information:
Investor Relations Contact
Anna Kleinhenn
Anna.Kleinhenn@fsinvestments.com
FS Investments Media Team
Melanie Hemmert
Melanie.Hemmert@fsinvestments.com
Unaudited Consolidated Statements of Operations
(in millions, except share and per share amounts)
Three Months Ended
March 31,
------------------------------------
2025 2024
----------------- -----------------
Investment income
From non-controlled/unaffiliated
investments:
Interest income $ 217 $ 288
Paid-in-kind interest income 16 17
Fee income 14 17
Dividend and other income 12 6
From non-controlled/affiliated
investments:
Interest income 8 6
Paid-in-kind interest income 18 10
Fee income 3 --
Dividend and other income 9 4
From controlled/affiliated
investments:
Interest income 15 21
Paid-in-kind interest income 28 8
Fee income -- --
Dividend and other income 60 57
----------------- -----------------
Total investment income 400 434
----------------- -----------------
Operating expenses
Management fees 52 55
Subordinated income incentive fees 39 43
Administrative services expenses 3 3
Accounting and administrative fees 1 1
Interest expense 113 116
Other general and administrative
expenses 5 4
----------------- -----------------
Total operating expenses 213 222
Net investment income 187 212
----------------- -----------------
Realized and unrealized gain/loss
Net realized gain (loss) on
investments:
Non-controlled/unaffiliated
investments (40) (225)
Non-controlled/affiliated
investments 9 (10)
Controlled/affiliated investments 13 (8)
Net realized gain (loss) on foreign
currency forward contracts 0 (0)
Net realized gain (loss) on foreign
currency 1 (3)
Net change in unrealized
appreciation (depreciation) on
investments:
Non-controlled/unaffiliated
investments 58 172
Non-controlled/affiliated
investments (20) 20
Controlled/affiliated investments (52) (6)
Net change in unrealized
appreciation (depreciation) on
foreign currency forward contracts (10) 8
Net change in unrealized gain (loss)
on foreign currency (26) 13
----------------- -----------------
Total net realized and unrealized
gain (loss) (67) (39)
Net increase (decrease) in net
assets resulting from operations $ 120 $ 173
================= =================
Per share information--basic and
diluted
Net increase (decrease) in net
assets resulting from operations
(Earnings (Losses) per Share) $ 0.43 $ 0.62
================= =================
Weighted average shares outstanding 280,066,433 280,066,433
================= =================
Consolidated Balance Sheets
(in millions, except share and per share amounts)
March 31, 2025
----------------------------
(Unaudited) December 31, 2024
-------------------------------- ----------------------------
Assets
Investments, at fair value
Non-controlled/unaffiliated
investments (amortized
cost--$9,307 and $8,830,
respectively) $ 9,109 $ 8,573
Non-controlled/affiliated
investments (amortized
cost--$1,192 and $1,128,
respectively) 1,184 1,140
Controlled/affiliated
investments (amortized
cost--$4,191 and $4,086,
respectively) 3,829 3,777
-------------------------------- ----------------------------
Total investments, at fair
value (amortized
cost--$14,690 and $14,044,
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