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PennantPark Investment Corp (NYSE:PNNT), a business development company with a market capitalization of $438 million and a P/E ratio of 9.28, has announced an issue with the financial statements of JF Holdings Corp, a portfolio company. According to a filing with the Securities and Exchange Commission, the financial statements for the years ending December 31, 2024, and 2023, filed as part of an amendment to PennantPark’s annual report, do not meet the requirements of Rule 3-09 of Regulation S-X.
On May 15, 2025, BDO USA, P.C., the independent registered public accounting firm for JF Holdings, informed PennantPark’s Chief Financial Officer that the financial statements included an inappropriate application of accounting principles, specifically the amortization of goodwill. As a result, these statements should not be relied upon.
PennantPark has taken steps to prevent further reliance on these financial statements. The company stated that this issue does not affect its own audited financial statements for the fiscal year ending September 30, 2024, nor the unaudited financial statements for the quarters ending December 31, 2024, and March 31, 2025. These financial statements were audited by RSM US LLP, and management believes they remain reliable. According to InvestingPro data, PennantPark maintains a "GREAT" overall financial health score of 3.14, suggesting strong operational stability.
PennantPark has committed to filing amended financial statements for JF Holdings once they are available. The company emphasized that the issue is isolated to JF Holdings and does not impact PennantPark’s overall financial health or previously issued statements. The company maintains a strong dividend yield of 14.16% and has maintained dividend payments for 19 consecutive years. Get deeper insights into PennantPark’s financial metrics and access comprehensive analysis with InvestingPro.
This disclosure is based on a press release statement filed with the SEC.
In other recent news, PennantPark Investment Corporation reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.18, which fell short of the forecasted $0.19. Revenue for the quarter was $30.66 million, missing the expected $33.13 million. Despite these minor misses, the company’s stock rose, reflecting investor confidence. The company maintained a strong investment portfolio valued at $1.2 billion and invested $177 million across new and existing portfolio companies. Additionally, the debt to equity ratio was reported at 1.28 times, indicating moderate leverage.
JPMorgan analyst Richard Shane adjusted the price target for PennantPark to $6.50 from the previous $6.00, maintaining a Neutral rating on the stock. This adjustment followed PennantPark’s second fiscal quarter results, where the core Net Investment Income (NII) per share was $0.18, slightly below the $0.19 expected by analysts. The company also reported a quarter-over-quarter decrease of 1.3% in Net Asset Value (NAV) per share to $7.48. However, this was slightly above JPMorgan’s estimate of $7.41.
PennantPark’s non-accruals, a measure of non-performing investments, improved to 1.6% of investments at cost and 0.4% at fair value. Shane highlighted potential strategies for PennantPark, including scaling the joint venture and rotating out of non-income-producing assets. Management aims to utilize approximately $65 million of undistributed NII to support the company’s dividend of $0.24 per share. These developments indicate a focus on strategic investment and capital preservation amidst challenging market conditions.
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