NEW YORK, Nov. 12, 2019 /PRNewswire/ -- Investcorp Credit Management BDC, Inc. ICMB ("ICMB" or the "Company") announced its financial results today for its fiscal first quarter ended September 30, 2019. The Company was formerly known as CM Finance Inc until August 30, 2019.
HIGHLIGHTS
- ICMB made four investments in four portfolio companies. The Company invested $20.3mm during the quarter. The weighted average yield of debt investments made in the quarter was 8.18%, inclusive of funding a revolving commitment.
- Four investments were fully realized during the quarter. These were the Company's investments in FPC Holdings, Immucor, PR Wireless, and Sears Holding Company.
- The weighted average yield on debt investments, at cost, decreased six basis points to 10.44%, compared to 10.50% as of June 30, 2019. The change in LIBOR during the quarter accounted for a negative 26 basis point effect on the yield of the Company's debt portfolio.
- Net asset value ("NAV") decreased $0.32 per share (or 3.04%) to $10.19, compared to $10.51 as of June 30, 2019.
Portfolio results, as of September 30, 2019: | |
Total assets | $319.3mm |
Investment portfolio, at fair value | $302.2mm |
Net assets | $138.8mm |
Weighted average yield on debt investments, at cost | 10.44% |
Net asset value per share | $10.19 |
Portfolio activity in the current quarter: | |
Number of new investments | 4 |
Total capital invested | $20.3mm |
Proceeds from repayments, sales, and amortization | $21.5mm |
Number of portfolio companies, end of period | 33 |
Net investment income (NII) | $3.5mm |
Net investment income per share | $0.26 |
Net decrease in net assets from operations | $0.9mm |
Net decrease in net assets from operations per share | $0.07 |
Quarterly per share distribution paid on October 16, 2019 | $0.25 |
Mr. Michael C. Mauer, the Company's Chief Executive Officer, said, "On August 30th, we officially became part of the Investcorp credit platform. Our BDC was officially renamed, but our focus remains the same – originating secured lending opportunities to provide the best possible risk-adjusted returns to our stockholders. The team and I are excited by the deal flow we are already seeing as part of a larger firm. We recognize that volatility is increasing in the leveraged finance markets and we're confident that we are very well positioned to create unique investment opportunities as the broader environment begins to shift."
On November 6, 2019, the Company's Board of Directors (the "Board") declared a distribution for the quarter ending December 31, 2019 of $0.25 per share, payable on January 2, 2020, to stockholders of record as of December 13, 2019. This represents a 14.77% yield on the Company's $6.77 share price as of market close on November 11, 2019. Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect the distribution to be comprised of a return of capital. The tax status of distributions will be determined at the end of the taxable year.
Portfolio and Investment Activities
During the quarter, the Company made investments in four portfolio companies, of which three were new portfolio companies, and one was an existing portfolio company. The aggregate capital invested during the quarter totaled $20.3mm at cost, and investments were made at a weighted average yield of 8.18%.
The Company realized $21.5mm of repayments, sales, and amortization, including sales of FPC Holdings, Immucor, PR Wireless, and Sears Holding Company, as well as the sale of a portion of the Company's position in Specialty Building Products Holdings. The Company realized and unrealized gains and losses accounted for a decrease in the Company's net investments of approximately $4.4mm, or $0.33 per share. The total net decrease in net assets resulting from operations for the quarter was $0.9mm, or $0.07 per share.
As of September 30, 2019, the Company's investment portfolio consisted of investments in 33 portfolio companies, of which 77.9% were first lien investments, 18.4% were second lien investments, and 3.7% were unitranche loans. The Company's debt portfolio consisted of 96.8% floating rate investments and 3.2% fixed rate investments.
As of September 30, 2019, the Company had one investment on non-accrual status, the Term Loan B of Fusion Connect Inc.
Capital Resources
As of September 30, 2019, the Company had $3.4mm in cash, $7.4mm in restricted cash and $11.0mm of capacity under its revolving credit facility with UBS AG, London Branch.
Subsequent Events
On October 18, 2019, the Company closed the public offering of $15mm in aggregate principal amount of additional 6.125% notes due 2023 (the "Notes"). The Notes constitute a further issuance of, rank equally in right of payment with, and form a single series with the $34.5mm in aggregate principal amount of the 6.125% Notes due 2023 that the Company initially issued on July 2, 2018 and July 12, 2018. On November 7, 2019, the underwriters exercised their option to purchase an additional $1.875 million in aggregate principal of the Notes. The total net proceeds received by the Company from the sale of the Notes, including the exercise of the underwriters' option, was approximately $16.4mm, based on the purchase price paid by the underwriters of 96.875% of the aggregate principal amount of the Notes, after deducting estimated offering expenses of approximately $255,000 payable by the Company.
Subsequent to September 30, 2019 and through November 11, 2019, the Company invested $19.0mm in new and existing portfolio companies and received no sales proceeds. As of November 11, 2019, the Company had 35 portfolio companies.
On November 6, 2019, the Board declared a distribution for the quarter ended December 31, 2019 of $0.25 per share payable on January 2, 2020 to stockholders of record as of December 13, 2019.
Investcorp Credit Management BDC, Inc. and Subsidiaries | |||||||
Consolidated Statements of Assets and Liabilities | |||||||
September 30, 2019 | |||||||
(Unaudited) | June 30, 2019 | ||||||
Assets | |||||||
Non-controlled, non-affiliated investments, at fair value (amortized cost of | $ | 302,204,646 | $ | 306,390,993 | |||
$321,790,047 and $ 321,504,359, respectively) | |||||||
Cash | 3,428,615 | 19,706,281 | |||||
Cash, restricted | 7,403,479 | 6,589,901 | |||||
Receivable for investments sold | 2,670,233 | 820,332 | |||||
Interest receivable | 3,321,581 | 3,090,639 | |||||
Deferred offering costs | 121,922 | 121,922 | |||||
Prepaid expenses and other assets | 179,459 | 227,924 | |||||
Total Assets | $ | 319,329,935 | $ | 336,947,992 | |||
Liabilities | |||||||
Notes payable: | |||||||
Term loan | $ | 122,000,000 | $ | 122,000,000 | |||
Revolving credit facility | 19,047,551 | 11,026,670 | |||||
2023 Notes payable | 34,500,000 | 34,500,000 | |||||
Deferred debt issuance costs | (1,753,135) | (2,000,262) | |||||
Notes payable, net | 173,794,416 | 165,526,408 | |||||
Payable for investments purchased | 385,644 | 22,276,343 | |||||
Dividend payable | 3,406,383 | 3,404,923 | |||||
Deferred financing costs payable | 1,037,000 | 1,037,000 | |||||
Income-based incentive fees payable | 545,639 | 545,991 | |||||
Base management fees payable | 436,965 | - | |||||
Accrued provision for taxes | - | 13,778 | |||||
Interest payable | 836,602 | 724,222 | |||||
Directors' fees payable | 75,480 | 95,240 | |||||
Accrued expenses and other liabilities | - | 240,197 | |||||
Total Liabilities | 180,518,129 | 193,864,102 | |||||
Commitments and Contingencies (Note 6) | |||||||
Net Assets | |||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized, | |||||||
13,625,533 and 13,619,690 shares issued and outstanding, respectively) | 13,626 | 13,620 | |||||
Additional paid-in capital | 198,485,768 | 198,444,923 | |||||
Distributable earnings (loss) | (59,687,588) | (55,374,653) | |||||
Total Net Assets | 138,811,806 | 143,083,890 | |||||
Total Liabilities and Net Assets | $ | 319,329,935 | $ | 336,947,992 | |||
Net Asset Value Per Share | $ | 10.19 | $ | 10.51 | |||
See notes to unaudited consolidated financial statements. | |||||||
Investcorp Credit Management BDC, Inc. and Subsidiaries | ||||||||||
Consolidated Statements of Operations (Unaudited) | ||||||||||
For the Three months ended | ||||||||||
2019 | 2018 | |||||||||
Investment Income: | ||||||||||
Interest income | $ | 7,570,262 | $ | 7,654,840 | ||||||
Payment in-kind interest income | 907,777 | 413,620 | ||||||||
Dividend income | - | 31,275 | ||||||||
Other fee income | 80,395 | 155,155 | ||||||||
Total investment income | 8,558,434 | 8,254,890 | ||||||||
Expenses: | ||||||||||
Interest expense | 2,351,745 | 2,264,857 | ||||||||
Base management fees | 1,355,078 | 1,351,855 | ||||||||
Income-based incentive fees | - | 120,321 | ||||||||
Professional fees | 309,853 | 232,800 | ||||||||
Allocation of administrative costs from advisor | 352,000 | 338,063 | ||||||||
Amortization of deferred debt issuance costs | 195,377 | 195,377 | ||||||||
Insurance expense | 83,762 | 84,440 | ||||||||
Directors' fees | 82,500 | 101,250 | ||||||||
Custodian and administrator fees | 129,872 | 7,500 | ||||||||
Offering expense | 51,750 | 51,750 | ||||||||
Other expenses | 156,270 | 119,181 | ||||||||
Total expenses | 5,068,207 | 4,867,394 | ||||||||
Waiver of base management fees | (44,183) | - | ||||||||
Waiver of income-based incentive fees | - | (22,000) | ||||||||
Net expenses | 5,024,024 | 4,845,394 | ||||||||
Net investment income | 3,534,410 | 3,409,496 | ||||||||
Net realized and unrealized gain/(loss) on investments: | ||||||||||
Net realized gain (loss) from investments | 31,073 | (258,192) | ||||||||
Net change in unrealized appreciation (depreciation) in value | ||||||||||
of investments | (4,472,035) | (1,723,263) | ||||||||
Total realized and unrealized gain (loss) on investments | (4,440,962) | (1,981,455) | ||||||||
Net increase (decrease) in net assets resulting from operations | ||||||||||
$ | (906,552) | $ | 1,428,041 | |||||||
Basic and diluted: | ||||||||||
Net investment income per share | $ | 0.26 | $ | 0.25 | ||||||
Earnings per share | $ | (0.07) | $ | 0.10 | ||||||
Weighted average shares of common stock outstanding | 13,625,279 | 13,650,097 | ||||||||
Distributions paid per common share | $ | 0.25 | $ | 0.25 | ||||||
See notes to unaudited consolidated financial statements. | ||||||||||
About Investcorp Credit Management BDC, Inc.
The Company is an externally-managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50mm and earnings before interest, taxes, depreciation and amortization of at least $15mm. The Company's investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about Investcorp Credit Management BDC, Inc., please visit www.icmbdc.com.
Forward-Looking Statements
Statements included herein may contain "forward-looking statements," which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein except as required by law. All forward-looking statements speak only as of the date of this press release.
Contacts
Investcorp Credit Management BDC, Inc.
Investor Relations
Email: icmbinvestorrelations@investcorp.com
Phone: 212-257-5199
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SOURCE Investcorp
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