SWK Holdings Corp (SWKH) 2024 Q4 法說會逐字稿

Greetings. Welcome to the SWK Holdings fourth-quarter 2024 conference call. (Operator Instructions)

問候。歡迎參加 SWK Holdings 2024 年第四季電話會議。（操作員指令）

Please note, this conference is being recorded. I will now turn the conference over to your host, Susan Xu, Investor Relations. You may begin.

請注意，本次會議正在錄音。現在我將會議交給主持人、投資人關係部 Susan Xu。你可以開始了。

Thank you. Good morning, everyone and thank you for joining SWK Holdings' fourth-quarter 2024 financial and corporate results call. Yesterday, SWK Holdings issued a press release detailing its financial results for the three months ended December 31, 2024. The press release can be found in the Investor Relations section of swkhold.com under News Releases.

謝謝。大家早安，謝謝您參加 SWK Holdings 2024 年第四季財務與公司業績電話會議。昨日，SWK控股發布了一份新聞稿，詳細介紹了其截至2024年12月31日三個月的財務業績。新聞稿可在 swkhold.com 的「新聞稿」下的「投資者關係」部分中找到。

Before beginning today's call, I would like to make the following statement regarding forward-looking statements. Today, we will make certain forward-looking statements about future expectations, plans, events and circumstances, including statements about our strategy, future operations, and our expectations regarding our capital allocation and cash resources. These statements are based on our current expectations, and you should not place undue reliance on these statements.

在開始今天的電話會議之前，我想就前瞻性陳述發表以下聲明。今天，我們將對未來的預期、計劃、事件和情況做出一些前瞻性的陳述，包括關於我們的策略、未來營運以及我們對資本配置和現金資源的預期的陳述。這些聲明是基於我們目前的預期，您不應過度依賴這些聲明。

Actual results may differ materially due to our risks and uncertainties, including those detailed in the risks and uncertainties factors section of SWK Holdings' 10-K filed with the SEC and other filings we make with the SEC from time to time. SWK Holdings disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or otherwise.

由於我們的風險和不確定性，實際結果可能存在重大差異，包括 SWK Holdings 向美國證券交易委員會提交的 10-K 文件以及我們不時向美國證券交易委員會提交的其他文件中的風險和不確定性因素部分中詳細說明的風險和不確定性因素。SWK Holdings 不承擔更新這些前瞻性聲明中包含的資訊的任何義務，無論由於新資訊、未來事件或其他原因。

Joining me from SWK Holdings on today's call is Jody Staggs, President and CEO; and Adam Rice, CFO, who will provide an update on SWK fourth-quarter 2024 corporate and financial results. Jody, go ahead.

參加今天電話會議的還有 SWK Holdings 總裁兼執行長 Jody Staggs；以及財務長 Adam Rice，他將介紹 SWK 2024 年第四季的公司和財務表現。喬迪，說吧。

Thank you, Susan and thanks, everyone, for joining our fourth-quarter conference call. We are pleased with SWK's fourth-quarter performance and the company enters 2025 on solid footing. Our fourth quarter was highlighted by solid financial performance, including $8.2 million of finance segment net income, improvement in the portfolio's credit quality and $44 million of capital deployed into yielding finance receivables to life science companies.

謝謝蘇珊，也謝謝大家參加我們的第四季電話會議。我們對 SWK 第四季的表現感到滿意，公司將以穩固的基礎邁入 2025 年。我們第四季的亮點是穩健的財務業績，包括 820 萬美元的財務部門淨收入、投資組合信用品質的提高以及 4,400 萬美元的資本用於向生命科學公司提供收益性融資應收款。

Our non-GAAP tangible financing book value per share increased 8% year over year to $21.15 and with shares trading at a discount to book and given our excess capital, we have been active purchasers of our shares having repurchased approximately 100,000 shares for $1.6 million since September 30, 2024. During the fourth quarter, we closed an up to $8 million senior secured term loan to Triple Ring Technologies, upsized the Eton loan to $30 million and advanced a cumulative $10.6 million to four performing borrowers.

我們的非 GAAP 有形融資每股帳面價值年增 8% 至 21.15 美元，由於股票交易價格低於帳面價值，考慮到我們的過剩資本，我們一直積極購買我們的股票，自 2024 年 9 月 30 日以來已以 160 萬美元的價格回購了約 100,000 股。在第四季度，我們向 Triple Ring Technologies 提供了高達 800 萬美元的優先擔保定期貸款，將 Eton 貸款增加至 3,000 萬美元，並向四位履約借款人累積預付了 1,060 萬美元。

In January, we closed an up to $15 million term loan with ImpediMed, with $10 million advance at close. These are all core SWK financings to commercial stage life science companies. Each is either public and has demonstrated the ability to raise capital or private with the support of sponsor.

今年 1 月，我們與 ImpediMed 達成了一筆高達 1,500 萬美元的定期貸款，其中預付款為 1,000 萬美元。這些都是 SWK 對商業階段生命科學公司的核心融資。這些公司要么是上市公司，並已證明有能力籌集資金，要么是在贊助商的支持下私募。

Since we last spoke, three SWK finance receivables were repaid at premiums to the GAAP carrying value. In December, Veru made a $4.2 million payment to fully satisfy the FC2 loyalty. The FC2 royalty generated a 45% IRR and a 2.7x MOIC. In December, Moleculight made a final payment totaling $12.2 million to repay its term loan to SWK.

自我們上次談話以來，已有三筆 SWK 財務應收款以高於 GAAP 帳面價值的價格償還。12 月，Veru 支付了 420 萬美元，以充分滿足 FC2 的忠誠度。FC2 特許權使用費產生了 45% 的 IRR 和 2.7 倍的 MOIC。12 月，Moleculight 支付了總計 1,220 萬美元的最後一筆款項，以償還對 SWK 的定期貸款。

The Moleculight term loan generated a 20% IRR and a 1.6 MOIC. SWK continues to hold equity in Moleculight, which is carried at zero on our books. In March, ANI Pharma made a $17.25 million payment to exercise an option to buy out the Iluvien royalty. The Iluvien royalty generated a 20% IRR and a 1.8x MOIC. At December 31, 2024, we had $13.8 million of gross finance receivables on non-accrual. The nonaccrual receivables have a 15% CECL reserve, thus, our net nonaccrual totaled $11.7 million.

Moleculight 定期貸款產生了 20% 的 IRR 和 1.6 MOIC。SWK 繼續持有 Moleculight 的股權，該股權在我們的帳簿上為零。3 月份，ANI Pharma 支付了 1,725 萬美元，行使了買斷 Iluvien 特許權使用費的選擇權。Iluvien 特許權使用費產生了 20% 的 IRR 和 1.8 倍的 MOIC。截至 2024 年 12 月 31 日，我們未提列的應收融資款項總額為 1,380 萬美元。非應計應收帳款有 15% 的 CECL 準備金，因此我們的淨非應計總額為 1,170 萬美元。

This morning, we announced the signing of a transaction to sell our remaining performing royalty portfolio for $34 million. The deal is expected to close in approximately two weeks. In combination with the Iluvien buyout, the $51.3 million of proceeds from the two monetization transactions is approximately $1 million more than the carrying value at December 31, 2024. Upon closing of the transaction, we also expect to close out a Japanese yen hedge, which will free up an additional $4.5 million of cash.

今天上午，我們宣布簽署一項交易，以 3400 萬美元的價格出售我們剩餘的表演特許權使用費組合。該交易預計將在大約兩週內完成。結合對 Iluvien 的收購，兩筆貨幣化交易所得收益為 5,130 萬美元，比 2024 年 12 月 31 日的帳面價值高出約 100 萬美元。交易完成後，我們也預計將結束日圓對沖，這將釋放額外的 450 萬美元現金。

Pro forma for these changes as well as a $3 million principal repayment from 4WEB in the first quarter of 2025 and using the 12/31/2024 balances, our go-forward gross portfolio consists of approximately $218 million of performing loans, $14 million of nonaccruals and approximately $5 million of equities and warrants.

根據這些變化的預測以及 2025 年第一季 4WEB 償還的 300 萬美元本金以及 2024 年 12 月 31 日的餘額，我們的未來總投資組合包括約 2.18 億美元的正常貸款、1400 萬美元的未計提提款項和約 500 萬美元的股票和股權。

Our fourth-quarter 2024 portfolio effective yield was 15.5%. The effective yield is a yield assuming all financial receivables pay as modeled. This figure is not adjusted for the post quarter changes but should be in the neighborhood of the go-forward portfolio yield even considering the royalty sale.

我們 2024 年第四季的投資組合有效收益率為 15.5%。有效收益率是假設所有金融應收款均按模型支付的收益率。該數字並未根據季度後變化進行調整，但即使考慮到特許權使用費出售，也應該接近未來投資組合收益率。

Finally, as of yesterday, our cash totaled over $30 million and we have no borrowings under our revolver. Assuming closing of the final royalty transaction and release of the FX hedge, our gross cash will total nearly $70 million. We anticipate the Board will declare a dividend on the closing of the final royalty transaction.

最後，截至昨天，我們的現金總額已超過 3000 萬美元，我們沒有循環信貸借款。假設最終特許權使用費交易結束並釋放外匯對沖，我們的總現金總額將接近 7,000 萬美元。我們預計董事會將在最終特許權使用費交易結束時宣布派發股息。

Turning to our Enteris CDMO division, which has been rebranded as MOD3 Pharma to signify its transformation into a pure-play CDMO business. We are pleased with MOD3's 2024 results as segment division revenue totaled $3.6 million, tripling from $1.2 million in 2023.

談到我們的 Enteris CDMO 部門，該部門已更名為 MOD3 Pharma，以標誌其轉型為純粹的 CDMO 業務。我們對 MOD3 2024 年的業績感到滿意，因為該部門的收入總計 360 萬美元，是 2023 年 120 萬美元的三倍。

We expect continued growth in 2025 and the team is focused on positioning the business for unsubsidized profitability by year-end. We are in regular contact with our strategic partner and believe they are pleased with MOD3's performance.

我們預計 2025 年將持續成長，團隊致力於在年底前實現無補貼獲利。我們與策略夥伴保持密切聯繫，相信他們對 MOD3 的表現感到滿意。

With that, I will turn the call to our CFO, Adam Rice, to review the quarter's financial results.

說完這些，我將把電話轉給我們的財務長亞當賴斯 (Adam Rice)，來審查本季的財務結果。

Thank you, Jody and good morning, everyone. Yesterday, we reported earnings for the fourth quarter of 2024. We reported GAAP pretax net income of $8.6 million or $0.70 per diluted share. Our reported fourth-quarter 2024 net income of $5.9 million after income tax expense of $2.7 million included a $1.1 million increase in finance receivables segment revenue and a $1.3 million increase in pharmaceutical development segment revenue.

謝謝你，喬迪，大家早安。昨天，我們報告了 2024 年第四季的收益。我們報告的 GAAP 稅前淨收入為 860 萬美元，即每股稀釋收益 0.70 美元。我們報告的 2024 年第四季淨收入為 590 萬美元，扣除所得稅費用 270 萬美元後，其中包括融資應收帳款部門收入增加 110 萬美元和製藥開發部門收入增加 130 萬美元。

The $1.1 million increase in revenue -- or in year-over-year finance receivables segment revenue was primarily due to a $2.3 million increase in interest and fees earned on newly funded loans and royalties, the accelerated fees on early payoffs -- and accelerated fees on early payoffs. The increase in finance receivables segment revenue was partially offset by $900,000 as a result of two investments entering non-accrual status this year.

收入增加 110 萬美元（或與去年同期相比，應收財務款部門收入增加）主要是由於新融資貸款和特許權使用費所賺取的利息和費用增加了 230 萬美元，以及提前還款的加速費用——以及提前還款的加速費用。由於今年有兩項投資進入非應計狀態，融資應收帳款部門收入的增加被 90 萬美元部分抵銷。

As of December 31, 2024, our GAAP book value per share was $23.45, a 5% increase compared to $22.33 as of December 31, 2023. Additionally, non-GAAP tangible finance book value per share totaled $21.15 as of December 31, 2024, an 8.3% increase compared to $19.53 as of December 31, 2023.

截至 2024 年 12 月 31 日，我們的每股 GAAP 帳面價值為 23.45 美元，較 2023 年 12 月 31 日的 22.33 美元增長 5%。此外，截至 2024 年 12 月 31 日，每股非 GAAP 有形財務帳面價值總計 21.15 美元，較 2023 年 12 月 31 日的 19.53 美元增加 8.3%。

Overall operating expenses which -- overall operating expenses, which include interest expense, pharmaceutical manufacturing, research and development expense, general and administrative expense and provision for credit losses were $6.6 million during fourth quarter 2024 compared to $6.8 million in fourth quarter 2023.

2024 年第四季的整體營運費用（包括利息費用、藥品製造、研發費用、一般及行政費用和信貸損失準備）為 660 萬美元，而 2023 年第四季為 680 萬美元。

MOD3 operating expenses were $1.6 million in fourth quarter 2024 compared to $1.8 million in fourth quarter 2023 and finance receivables segment operating expenses were $5.3 million in the fourth quarter 2024 compared to $5.6 million in fourth quarter 2023.

2024 年第四季，MOD3 營運費用為 160 萬美元，而 2023 年第四季為 180 萬美元，2024 年第四季融資應收帳款部門營運費用為 530 萬美元，而 2023 年第四季為 560 萬美元。

The finance receivable operating segment expenses further breakdown for fourth quarter 2024 to general and administrative expenses of $2.1 million, provision for credit losses of $2 million, and interest expense of $1.2 million. And for fourth quarter 2023, general and administrative expenses of $2.1 million, provision for credit losses of $2.4 million, and interest expense of $1.1 million.

2024 年第四季度，融資應收帳款營運部門費用進一步細分為 210 萬美元的一般及行政費用、200 萬美元的信用損失準備金和 120 萬美元的利息費用。2023 年第四季，一般及行政費用為 210 萬美元，信貸損失準備金為 240 萬美元，利息費用為 110 萬美元。

The decrease in finance receivables segment operating expenses was mainly due to a $400,000 decrease in provision for credit losses. The decrease in provision for credit losses is most notably attributed to the strategic exit of three non-accrual investments during the quarter.

應收融資款部門營業費用的減少主要是因為信用損失準備金減少40萬美元。信貸損失準備金的減少最顯著的原因是本季三項非應計投資的策略退出。

Turning to our share repurchase program. We bought back roughly 50,000 shares at a total cost of $800,000 during the quarter. Since quarter close, we have repurchased an additional 47,000 shares for a total cost of $800,000.

談談我們的股票回購計劃。我們在本季回購了約 50,000 股，總成本為 800,000 美元。自季度結束以來，我們又回購了 47,000 股，總成本為 800,000 美元。

Lastly, for financial reporting purposes, we have transitioned the MOD3 segment to held for sale as of December 31, 2024. The transition to held-for-sale status was based on criteria set forth in GAAP accounting guidance and is related to the option purchase agreement entered into between MOD3 and a strategic partner effective January 1, 2024.

最後，出於財務報告目的，我們已於 2024 年 12 月 31 日將 MOD3 部門轉為持有待售。向持有待售狀態的轉變是基於 GAAP 會計指南中規定的標準，並與 MOD3 與策略合作夥伴之間簽訂的自 2024 年 1 月 1 日起生效的選擇權購買協議有關。

With that, I'll turn it back over to Jody.

說完這些，我會把話題轉回給喬迪。

Thank you, Adam. We entered 2025 with a healthy loan portfolio yielding in the mid-teens as well as $30 million of gross cash. The sale of our remaining performing royalty portfolio and closeout of the FX hedge will add an additional $39 million of cash to our balance sheet and we anticipate declaring a dividend on the closing of the final royalty transaction.

謝謝你，亞當。進入 2025 年，我們擁有健康的貸款組合，收益率達到十幾歲的中段，總現金餘額為 3,000 萬美元。出售我們剩餘的特許權使用費投資組合併清算外匯對沖將為我們的資產負債表增加 3900 萬美元的現金，我們預計在最終特許權使用費交易結束時宣布股息。

Our MOD3 CDMO division is self-sufficient and working with our strategic partner to address the sizable need for Phase I and Phase II nasal CDMO services.

我們的 MOD3 CDMO 部門能夠自給自足，並與我們的策略合作夥伴合作，滿足對 I 期和 II 期鼻腔 CDMO 服務的大量需求。

With that, let's open the call to questions.

現在，我們開始提問。

(Operator Instructions) [Scott Jensen], Private Investor.

(操作員指示)[Scott Jensen]，私人投資者。

Good morning, Jody and team. Congratulations on so much progress since we last spoke.

早上好，喬迪和團隊。恭喜我們自上次談話以來取得瞭如此大的進展。

Thank you.

謝謝。

I guess I got a couple questions for you. When you're thinking about a dividend, since it's such a large pile of cash, are you thinking about ongoing dividend or a special dividend, returning some of that cash, that cash pile to shareholders?

我想我有幾個問題想問你。當您考慮股息時，由於這是一大筆現金，您是否考慮持續股息或特別股息，將部分現金、現金儲備返還給股東？

Yeah, Scott, thanks. So the Board is still considering our options. I would anticipate initially a one-time special dividend. That doesn't mean that there might not be additional special dividends in the future. But at this time, I don't anticipate a recurring dividend.

是的，斯科特，謝謝。因此董事會仍在考慮我們的選擇。我最初預計會有一次性特別股息。這並不意味著未來可能不會有額外的特別股息。但目前，我預計不會有經常性股利。

Yeah. Love it. Love it. That's what I would hope for as well. Second, as far as the buyback, where are you on the current buyback? And then again, is that going to be something the Board is going to consider about renewing or increasing the buyback?

是的。愛它。愛它。這也是我所希望的。第二，就回購而言，目前你們的回購進度如何？那麼，董事會是否會考慮更新或增加回購？

Yeah. And Adam, if you have the email pulled up, I might -- from Courtney, I might have you look and check how much room we have. But we do have room -- enough room on our buyback. It's been interesting trying to navigate this with our blackout period. So once we go into the blackout period, the algorithm takes over and we don't really have control over how many shares are repurchased.

是的。亞當，如果你打開考特尼寄來的郵件，我可能會讓你看看我們還有多少房間。但我們確實有足夠的回購空間。嘗試利用我們的停電期來解決這個問題是很有趣的。因此，一旦我們進入停售期，演算法就會接管，我們無法真正控制回購多少股票。

When we're not in the blackout period, we can direct it and be more aggressive or less aggressive. So I would say we're still active repurchasers of our shares. We think particularly with the news we announced today, shares are trading at a 20% discount. That's an attractive use of capital. So we'll continue to do that.

當我們沒有處於停電期時，我們可以引導它，使其更具攻擊性或更不具攻擊性。所以我想說我們仍在積極回購我們的股票。我們認為，特別是我們今天宣布的消息，股票交易價格折價了 20%。這是一種很吸引人的資本運用方式。因此我們會繼續這樣做。

We should be out of the blackout period when we report first quarter roughly May 15, in that ballpark. And the program will expire. I think it expires roughly that date. I don't -- we have not discussed it but I think the Board views the buyback as an attractive use of capital. And I would expect, assuming everything else is equal, that the Board would strongly consider reauthorizing the program for another year.

大概當我們在 5 月 15 日左右報告第一季報告時，我們就應該走出停電期了。該計劃將會到期。我認為它大約在那個日期到期。我沒有——我們沒有討論過這個問題，但我認為董事會認為回購是一種有吸引力的資本用途。我希望，假設其他一切都相同，董事會將認真考慮將該計劃再授權一年。

Excellent. Thank you. And I just also want to say congratulations on all those workouts, Biolase, et cetera. Those were excellent and cleaning it up, you've been doing a great job (technical difficulty)

出色的。謝謝。我還要對所有這些訓練、Biolase等等表示祝賀。這些都是非常棒的，清理工作做得很好，你做得很好（技術難度）

Thank you, Scott.

謝謝你，斯科特。

I will get out of queue and see if somebody else but keep up the good work and thank you again and love reading the progress.

我會退出隊列，看看是否有其他人，但請繼續努力，再次感謝您，並喜歡閱讀進度。

Thank you. Appreciate the support.

謝謝。感謝您的支持。

(Operator Instructions) Okay. We have no further questions in the queue. I would like to turn the floor back to Jody for any closing remarks.

（操作員指令）好的。我們沒有其他問題了。我想將發言權交還給喬迪，請他做最後發言。

Thanks, John. Thank you for joining us today and for your continued support of SWK. We hope everyone has a great day. Thanks.

謝謝，約翰。感謝您今天加入我們並繼續對 SWK 的支持。我們希望每個人都度過愉快的一天。謝謝。

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，各位現在可以掛斷電話了。感謝您的參與。