SWK Holdings Corp Q4 FY2024 earnings call

• Solid fourth quarter financial performance with $8.2 million finance segment net income, improved portfolio credit quality, and $44 million capital deployed to life science finance receivables. - Non-GAAP tangible financing book value per share increased 8% year-over-year to $21.15, with shares repurchased approximately 100,000 for $1.6 million since September 30, 2024. - Closed loans to Triple Ring Technologies (upsized to $30 million) and Impedimed ($15 million term loan with $10 million advanced at close). - Three SWK finance receivables repaid at premiums: Veru ($4.2 million), MolecuLight ($12.2 million), and ANI Pharma ($17.25 million). - Announced sale of remaining performing royalty portfolio for $34 million, expected to close in two weeks, with close of yen hedge freeing $4.5 million cash. - MOD3 Pharma 2024 revenue tripled from 2023, focused on positioning for unsubsidized profitability by year-end 2025.

Finance segment: Fourth quarter 2024 net income was $8.2 million. Revenue from Finance Receivables increased by $1.1 million year-over-year, driven by a $2.3 million increase in interest and fees from newly funded loans and royalties, offset by $900,000 from two investments entering non-accrual status. As of December 31, 2024, gross finance receivables on non-accrual were $13.8 million with a 15% CECL reserve, resulting in net non-accrual totaling $11.7 million. MOD3 Pharma: 2024 segment revenue totaled $3.6 million, tripling from $1.2 million in 2023.

• Enters 2025 with healthy loan portfolio yielding mid-teens and $30 million gross cash. - Sale of royalty portfolio and yen hedge close to add approximately $39 million cash, anticipate dividend on final royalty transaction close. - MOD3 expected to continue growth in 2025.

Q: When thinking about a dividend, will it be ongoing or a special dividend?

A: The Board is still considering options; initially, a one-time special dividend is anticipated, with no immediate plan for a recurring dividend.

Q: What is the status of the share buyback?

A: The company is still an active repurchaser of shares, with room left on the buyback program. The blackout period affects timing, but the Board is expected to consider reauthorizing the buyback program for another year