Arboretum Silverleaf Income Fund Posts $279,000 Loss as Finance Income Falls 67%

Arboretum Silverleaf Income Fund, L.P., an investment partnership focused on finance leases and collateralized loans, posted a net loss of $279,000 for the six months ended June 30, 2024, compared with a loss of $356,000 in the same period a year earlier. Read more earnings reports.

Total revenue for the half-year period fell 67% to $147,000 from $443,000 in the first half of 2023. Finance income, the fund's primary revenue source, dropped to $144,000 from $430,000 year-over-year. Interest income declined to $3,351 from $12,548.

The fund recorded a $53,000 reduction in its allowance for credit losses during the six months ended June 30, 2024, bringing net revenue to $200,000. In the prior-year period, the fund had increased its credit loss allowance by $211,000, which reduced net revenue to $231,000.

Operating expenses totaled $479,000 for the first half of 2024, down from $588,000 a year earlier. Management fees paid to the investment manager declined to $210,000 from $300,000. Professional fees came in at $184,000 compared with $208,000 in the prior period. Administration expenses rose slightly to $70,106 from $69,835.

Second Quarter Performance

For the three months ended June 30, 2024, the partnership reported a net loss of $155,000, compared with a loss of $92,000 in the second quarter of 2023. Revenue for the quarter totaled $66,687, down from $226,000 a year earlier.

The fund recorded an $8,000 reduction in its allowance for credit losses during the second quarter, bringing net revenue to $75,000. Total expenses for the quarter were $230,000, down from $286,000 in the prior-year period.

Net loss attributable to limited partners was $0.11 per weighted average limited partnership interest for the six months ended June 30, 2024, compared with $0.14 per interest in the first half of 2023. For the second quarter alone, the loss was $0.06 per interest versus $0.04 a year earlier.

Balance Sheet and Asset Quality

Total assets declined to $6.73 million at June 30, 2024, from $9.45 million at December 31, 2023. Investments in finance leases, net of allowances, fell to $1.76 million from $3.44 million over the same period. The allowance for credit losses on finance leases decreased to $29,000 at mid-year from $82,000 at year-end 2023.

Cash and cash equivalents stood at $1.13 million at June 30, 2024, down from $1.41 million at the start of the year. Collateralized loans receivable dropped to $32,794 from $100,074. Other assets declined to $3.81 million from $4.50 million.

Total liabilities decreased to $1.29 million from $1.95 million at December 31, 2023. Deferred revenue fell to $128,000 from $527,000. Distributions payable to limited partners totaled $756,000 at June 30, 2024, compared with $1.04 million at year-end.

Partners' equity contracted to $5.44 million at June 30, 2024, from $7.50 million at the beginning of the year. The general partner's deficit position widened to $173,000 from $152,000.

Cash Flow and Distributions

Cash used in operating activities totaled $35,000 for the six months ended June 30, 2024, compared with cash provided by operations of $240,000 in the prior-year period. The swing reflected the decline in revenue and changes in working capital accounts.

Investing activities generated $1.80 million in cash during the first half of 2024, compared with $3.07 million in the same period of 2023. The fund received $1.73 million from changes in leases and $67,280 from loan originations, amortization, and prepayments.

Financing activities consumed $2.04 million in cash during the six-month period, primarily from distributions to limited partners. In the prior year, financing activities used $1.39 million, which included $542,000 in loan repayments and $246,000 in provisions for credit losses in addition to partner distributions.

The partnership distributed $2.04 million to limited partners during the first half of 2024, compared with $592,000 in the same period of 2023. No limited partner redemptions occurred in 2024, compared with one $6,340 redemption in the prior year.