PR Newswire
NEW YORK, Sept. 18, 2023
NEW YORK, Sept. 18, 2023 /PRNewswire/ -- Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) ("ICMB" or the "Company") announced its financial results today for its fiscal fourth quarter ended June 30, 2023.
HIGHLIGHTS
- On September 14, 2023, the Company's Board of Directors (the "Board") declared a distribution of $0.12 per share for the quarter ending September 30, 2023, payable in cash on November 2, 2023, to stockholders of record as of October 12, 2023 and a supplemental distribution of $0.03 per share, payable on November 2, 2023, to stockholders of record as of October 12, 2023.
- During the quarter, ICMB made investments in two new portfolio companies and two existing portfolio companies. These investments totaled $15.1 million, at cost. The weighted average yield (at origination) of debt investments made in the quarter was 15.5%.
- ICMB fully realized one portfolio company during the quarter, totaling $8.66 million in proceeds. The internal rate of return on this investment was 9.77%.
- During the quarter, the Company had net advances of $0.9 million on its existing delayed draw and revolving credit commitments to portfolio companies.
- The weighted average yield on debt investments, at cost, for the quarter ended June 30, 2023, was 12.45%, compared to 13.36% for the quarter ended March 31, 2023.
- Net asset value decreased $0.04 per share to $6.09, compared to $6.13 as of March 31, 2023. Net assets decreased by $0.5 million, or 0.6%, during the quarter ended June 30, 2023 compared to March 31, 2023.
Portfolio results, as of and for the three months ended June 30, 2023:
Total assets | $231.8mm |
Investment portfolio, at fair value | $220.1mm |
Net assets | $87.7mm |
Weighted average yield on debt investments, at cost (1) | 12.45 % |
Net asset value per share | $6.09 |
Portfolio activity in the current quarter: | |
Number of new investments | 2 |
Total capital invested | $15.1mm |
Proceeds from repayments, sales, and amortization | $8.7mm |
Number of portfolio companies, end of period | 36 |
Net investment income (NII) | $2.2mm |
Net investment income per share | $0.15 |
Net increase in net assets from operations | $2.1mm |
Net increase in net assets from operations per share | $0.14 |
Quarterly per share distribution paid on June 30, 2023 | $0.18 |
(1) Represents weighted average yield on total debt investments for the three months ended June 30, 2023. Weighted average yield on total debt investments is the annualized rate of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average yield on total debt investments reflected above does not represent actual investment returns to the Company's stockholders. |
Mr. Michael C. Mauer, the Company's Chief Executive Officer, said "We continue to focus on managing the portfolio in this inflationary environment; specifically focusing on the diversity of our investments, reducing average position sizes, and working with borrowers and sponsors where covenant or liquidity issues exist. Our expectation is that well-capitalized companies with strong sponsor backing will continue to outperform over the coming quarters."
The Company's dividend framework provides a quarterly base dividend and may be supplemented, at the discretion of the Board, by additional dividends as determined to be available by the Company's net investment income and performance during the quarter.
On September 14, 2023, the Board declared a distribution for the quarter ended September 30, 2023 of $0.12 per share payable on November 2, 2023 to stockholders of record as of October 12, 2023 and a supplemental distribution of $0.03 per share, payable on November 2, 2023, to stockholders of record as of October 12, 2023.
This distribution represents a 16.57% yield on the Company's $3.62 share price as of market close on June 30, 2023. Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect the dividend for the quarter ending June 30, 2023, to be comprised of a return of capital. The Company's investment adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. The Company estimates the source of its distributions as required by Section 19(a) of the Investment Company Act of 1940 to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods, but the Company will not be able to determine whether any specific distribution will be treated as taxable earnings or as a return of capital until after at the end of the taxable year.
Portfolio and Investment Activities
During the quarter, the Company made investments in two new portfolio companies and two existing portfolio companies. The aggregate capital invested during the quarter totaled $15.1 million, at cost, and the debt investments were made at a weighted average yield of 15.48%.
The Company received proceeds of $8.7 million from repayments, sales and amortization during the quarter, primarily related to the realization of Altern Marketing, LLC.
During the quarter, the Company had net advances of $0.9 million on its existing and new delayed draw and revolving credit commitments to portfolio companies.
The Company's net realized, and unrealized gains and losses accounted for a decrease in the Company's net investments of approximately $131,000, or $0.01 per share. The total net increase in net assets resulting from operations for the quarter was $2.1 million, or $0.14 per share.
As of June 30, 2023, the Company's investment portfolio consisted of investments in 36 portfolio companies, of which 89.21% were first lien investments and 10.79% were equity, warrants, and other investments. The Company's debt portfolio consisted of 99.6% floating rate investments and 0.4% fixed rate investments.
Capital Resources
As of June 30, 2023, the Company had $9.2 million in cash, of which $8.1 million was restricted cash, and $28.1 million of unused capacity under its revolving credit facility with Capital One, N.A.
Subsequent Events
Subsequent to June 30, 2023 and through September 15, 2023, the Company invested a total of $4.1 million, which included investments in one new portfolio company and one existing portfolio company. As of September 15, 2023, the Company had investments in 37 portfolio companies.
Investcorp Credit Management BDC, Inc. and Subsidiaries Consolidated Statements of Assets and Liabilities | ||||||||||
June 30, 2023 | June 30, 2022 | |||||||||
Assets | ||||||||||
Non-controlled, non-affiliated investments, at fair value (amortized cost of | $ | 210,150,018 | $ | 223,037,183 | ||||||
Affiliated investments, at fair value (amortized cost of $23,979,565 and | 9,961,311 | 10,646,803 | ||||||||
Total investments, at fair value (amortized cost of $243,298,816 and $277,568,005, | 220,111,329 | 233,683,986 | ||||||||
Cash | 1,093,758 | 2,550,021 | ||||||||
Cash, restricted | 8,057,458 | 6,605,056 | ||||||||
Principal receivable | 93,581 | 835,043 | ||||||||
Interest receivable | 2,041,877 | 2,298,443 | ||||||||
Payment-in-kind interest receivable | 46,088 | 2,137 | ||||||||
Other receivables | 1,050 | — | ||||||||
Prepaid expenses and other assets | 361,719 | 410,401 | ||||||||
Total Assets | $ | 231,806,860 | $ | 246,385,087 | ||||||
Liabilities | ||||||||||
Notes payable: | ||||||||||
Revolving credit facility | $ | 71,900,000 | $ | 84,000,000 | ||||||
2026 Notes payable | 65,000,000 | 65,000,000 | ||||||||
Deferred debt issuance costs | (1,220,556) | (1,913,889) | ||||||||
Unamortized discount | (195,553) | (266,663) | ||||||||
Notes payable, net | 135,483,891 | 146,819,448 | ||||||||
Payable for investments purchased | 1,795,297 | 246,984 | ||||||||
Dividend payable | 2,590,520 | 2,157,872 | ||||||||
Income-based incentive fees payable | 576,023 | 182,095 | ||||||||
Base management fees payable | 906,218 | 1,054,063 | ||||||||
Interest payable | 2,293,766 | 1,574,356 | ||||||||
Directors' fees payable | 15,755 | 20,780 | ||||||||
Accrued expenses and other liabilities | 445,082 | 820,097 | ||||||||
Total Liabilities | 144,106,552 | 152,875,695 | ||||||||
Net Assets | ||||||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized 14,391,775 | 14,392 | 14,386 | ||||||||
Additional paid-in capital | 203,327,714 | 203,590,126 | ||||||||
Distributable earnings (loss) | (115,641,798) | (110,095,120) | ||||||||
Total Net Assets | 87,700,308 | 93,509,392 | ||||||||
Total Liabilities and Net Assets | $ | 231,806,860 | $ | 246,385,087 | ||||||
Net Asset Value Per Share | $ | 6.09 | $ | 6.50 | ||||||
Investcorp Credit Management BDC, Inc. and Subsidiaries Consolidated Statements of Operations | |||||||||||||||||
For the Years Ended June 30, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Investment Income: | |||||||||||||||||
Interest income | |||||||||||||||||
Non-controlled, non-affiliated investments | $ | 23,822,181 | $ | 22,641,798 | $ | 22,716,304 | |||||||||||
Affiliated investments | (20,611) | 29,813 | 97,293 | ||||||||||||||
Total interest income | 23,801,570 | 22,671,611 | 22,813,597 | ||||||||||||||
Payment in-kind interest income | |||||||||||||||||
Non-controlled, non-affiliated investments | 1,250,169 | 102,720 | 2,334,246 | ||||||||||||||
Affiliated investments | 70,070 | 208,470 | 155,780 | ||||||||||||||
Total payment-in-kind interest income | 1,320,239 | 311,190 | 2,490,026 | ||||||||||||||
Dividend income | |||||||||||||||||
Non-controlled, non-affiliated investments | 101,755 | — | — | ||||||||||||||
Affiliated investments | — | 296,126 | — | ||||||||||||||
Total dividend income | 101,755 | 296,126 | — | ||||||||||||||
Payment in-kind dividend income | - | ||||||||||||||||
Non-controlled, non-affiliated investments | 691,972 | 282,952 | — | ||||||||||||||
Affiliated investments | — | — | — | ||||||||||||||
Total payment-in-kind dividend income | 691,972 | 282,952 | — | ||||||||||||||
Other fee income | |||||||||||||||||
Non-controlled, non-affiliated investments | 768,617 | 868,727 | 1,383,850 | ||||||||||||||
Affiliated investments | — | 759 | 1,502 | ||||||||||||||
Total other fee income | 768,617 | 869,486 | 1,385,352 | ||||||||||||||
Total investment income | 26,684,153 | 24,431,365 | 26,688,975 | ||||||||||||||
Expenses: | |||||||||||||||||
Interest expense | 8,413,409 | 6,633,587 | 7,359,079 | ||||||||||||||
Base management fees | 4,201,394 | 4,594,588 | 4,716,233 | ||||||||||||||
Income-based incentive fees | 401,597 | (348,670) | - | ||||||||||||||
Provision for tax expense | 294,330 | 270,618 | 268,992 | ||||||||||||||
Professional fees | 984,290 | 1,302,513 | 1,514,186 | ||||||||||||||
Allocation of administrative costs from Adviser | 966,045 | 1,247,205 | 1,397,069 | ||||||||||||||
Amortization of deferred debt issuance costs | 693,333 | 621,111 | 1,107,497 | ||||||||||||||
Amortization of original issue discount - 2026 Notes | 71,110 | 71,110 | |||||||||||||||
