NEW YORK, Feb. 10, 2020 /PRNewswire/ -- Investcorp Credit Management BDC, Inc. ICMB ("ICMB" or the "Company") announced its financial results today for its fiscal second quarter ended December 31, 2019.
HIGHLIGHTS
- ICMB made seven investments in six portfolio companies. The Company invested $39.7mm during the quarter. The weighted average yield of debt investments made in the quarter was 10.33%, inclusive of funding a revolving commitment.
- Three investments were fully realized during the quarter. These were the Company's investments in Carlton Group (first and second lien) and Lionbridge Technologies, Inc.
- The weighted average yield on debt investments, at cost, decreased four basis points to 10.41%, compared to 10.44% as of September 30, 2019. The change in LIBOR during the quarter accounted for a negative 20 basis point effect on the yield of the Company's debt portfolio.
- Net asset value ("NAV") decreased $0.04 per share (or 0.39%) to $10.15, compared to $10.19 as of September 30, 2019.
Portfolio results, as of December 31, 2019: | |
Total assets | $339.3mm |
Investment portfolio, at fair value | $305.0mm |
Net assets | $139.6mm |
Weighted average yield on debt investments, at cost | 10.41% |
Net asset value per share | $10.15 |
Portfolio activity in the current quarter: | |
Number of new investments | 7 |
Total capital invested | $39.7mm |
Proceeds from repayments, sales, and amortization | $37.9mm |
Number of portfolio companies, end of period | 35 |
Net investment income (NII) | $3.8mm |
Net investment income per share | $0.27 |
Net increase in net assets from operations | $3.0mm |
Net increase in net assets from operations per share | $0.22 |
Quarterly per share distribution paid on January 2, 2020 | $0.25 |
Mr. Michael C. Mauer, the Company's Chief Executive Officer, said "Our efforts to diversify the portfolio continued to bear fruit this quarter, as we are now invested in 35 portfolio companies across 22 industries. We continue to believe that 1st lien loans offer the best risk-adjusted returns in the current environment, and our portfolio composition increasingly reflects this belief. The deal flow we are seeing as part of Investcorp continues to generate positive momentum in origination, and our goal is to grow the portfolio to 40 or more borrowers over the coming quarters."
On February 4, 2020, the Company's Board of Directors (the "Board") declared a distribution for the quarter ending March 31, 2020 of $0.25 per share, payable on April 2, 2020, to stockholders of record as of March 13, 2020. This represents a 14.93% yield on the Company's $7.18 share price as of market close on February 7, 2020. 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 six portfolio companies, of which four were new portfolio companies, and two were existing portfolio companies. The aggregate capital invested during the quarter totaled $39.7mm at cost, and investments were made at a weighted average yield of 10.33%.
The Company realized $37.9mm of repayments, sales, and amortization, including the repayments of first and second lien loans by Carlton Group, and a second lien loan by Lionbridge Technologies, Inc., as well as the sale of a portion of the Company's position in Hyperion Materials & Technologies, Inc. The Company's realized and unrealized gains and losses accounted for a decrease in the Company's net investments of approximately $0.8mm, or $0.06 per share. The total net increase in net assets resulting from operations for the quarter was $3.0mm, or $0.22 per share.
As of December 31, 2019, the Company's investment portfolio consisted of investments in 35 portfolio companies, of which 82.6% were first lien investments, 13.8% were second lien investments, and 3.6% were unitranche loans. The Company's debt portfolio consisted of 96.9% floating rate investments and 3.1% fixed rate investments.
As of December 31, 2019, the Company had one investment on non-accrual status, the Term Loan B of Fusion Connect Inc.
Capital Resources
As of December 31, 2019, the Company had $17.2mm in cash, $8.3mm in restricted cash and $30.0mm of capacity under its revolving credit facility with UBS AG, London Branch.
Subsequent Events
Subsequent to December 31, 2019 and through February 7, 2020, the Company invested $16.2mm in new and existing portfolio companies and received no repayments. As of February 10, 2020, the Company had 37 portfolio companies.
On February 4, 2020, the Board declared a distribution for the quarter ended March 31, 2020 of $0.25 per share payable on April 2, 2020 to stockholders of record as of March 13, 2020.
Investcorp Credit Management BDC, Inc. and Subsidiaries | |||||||
Consolidated Statements of Assets and Liabilities | |||||||
December 31, 2019 | |||||||
(Unaudited) | June 30, 2019 | ||||||
Assets | |||||||
Non-controlled, non-affiliated investments, at fair value (amortized cost of | $ | 304,953,607 | $ | 306,390,993 | |||
$325,352,114 and $ 321,504,359, respectively) | |||||||
Cash | 17,192,788 | 19,706,281 | |||||
Cash, restricted | 8,933,193 | 6,589,901 | |||||
Receivable for investments sold | 5,417,165 | 820,332 | |||||
Interest receivable | 2,181,747 | 3,090,639 | |||||
Payment-in-kind interest receivable | 388,150 | - | |||||
Deferred offering costs | 121,922 | 121,922 | |||||
Prepaid expenses and other assets | 77,699 | 227,924 | |||||
Total Assets | $ | 339,266,271 | $ | 336,947,992 | |||
Liabilities | |||||||
Notes payable: | |||||||
Term loan | $ | 122,000,000 | $ | 122,000,000 | |||
Revolving credit facility | - | 11,026,670 | |||||
2023 Notes payable | 51,375,000 | 34,500,000 | |||||
Deferred debt issuance costs | (1,997,818) | (2,000,262) | |||||
Notes payable, net | 171,377,182 | 165,526,408 | |||||
Payable for investments purchased | 20,130,000 | 22,276,343 | |||||
Dividend payable | 3,437,133 | 3,404,923 | |||||
Deferred financing costs payable | 1,037,000 | 1,037,000 | |||||
Income-based incentive fees payable | 1,061,213 | 545,991 | |||||
Base management fees payable | 1,312,131 | - | |||||
Accrued provision for taxes | - | 13,778 | |||||
Interest payable | 1,133,736 | 724,222 | |||||
Directors' fees payable | 14,832 | 95,240 | |||||
Accrued expenses and other liabilities | 205,710 | 240,197 | |||||
Total Liabilities | 199,708,937 | 193,864,102 | |||||
Commitments and Contingencies (Note 6) | |||||||
Net Assets | |||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized, | |||||||
13,748,532 and 13,619,690 shares issued and outstanding, respectively) | 13,749 | 13,620 | |||||
Additional paid-in capital | 199,700,863 | 198,444,923 | |||||
Distributable earnings (loss) | (60,157,278) | (55,374,653) | |||||
Total Net Assets | 139,557,334 | 143,083,890 | |||||
Total Liabilities and Net Assets | $ | 339,266,271 | $ | 336,947,992 | |||
Net Asset Value Per Share | $ | 10.15 | $ | 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 | For the six months ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Investment Income: | |||||||||||||||
Interest income | $ | 7,741,904 | $ | 8,481,251 | $ | 15,312,166 | $ | 16,136,091 | |||||||
Payment in-kind interest income | 1,454,214 | 540,308 | 2,361,991 | 953,928 | |||||||||||
Dividend income | - | - | - | 31,275 | |||||||||||
Other fee income | 235,331 | 277,365 | 315,726 | 432,520 | |||||||||||
Total investment income | 9,431,449 | 9,298,924 | 17,989,883 | 17,553,814 | |||||||||||
Expenses: | |||||||||||||||
Interest expense | 2,533,278 | 2,156,537 | 4,885,023 | 4,421,394 | |||||||||||
Base management fees | 1,369,983 | 1,405,297 | 2,725,061 | 2,757,152 | |||||||||||
Income-based incentive fees | 851,842 | 753,721 | 851,842 | 874,042 | |||||||||||
Provision for tax expense | 10,018 | 12,946 | 10,018 | 12,946 | |||||||||||
Professional fees | 390,107 | 233,528 | 699,960 | 466,328 | |||||||||||
Allocation of administrative costs from advisor | 330,000 | 341,633 | 682,000 | 679,696 | |||||||||||
Amortization of deferred debt issuance costs | 195,377 | 195,377 | 390,754 | 390,754 | |||||||||||
Insurance expense | 83,761 | 84,440 | 167,523 | 168,880 | |||||||||||
Directors' fees | 22,500 | 101,250 | 105,000 | 202,500 | |||||||||||
Custodian and administrator fees | 77,597 | 7,500 | 207,469 | 15,000 | |||||||||||
Offering expense | 85,604 | 51,750 | 137,354 | 103,500 | |||||||||||
Other expenses | 120,590 | 236,033 | 276,860 | 355,214 | |||||||||||
Total expenses | 6,070,657 | 5,580,012 | 11,138,864 | 10,447,406 | |||||||||||
Waiver of base management fees | (57,852) | - | (102,035) | - | |||||||||||
Waiver of income-based incentive fees | (336,619) | - | (336,619) | (22,000) | |||||||||||
Net expenses | 5,676,186 | 5,580,012 | 10,700,210 | 10,425,406 | |||||||||||
Net investment income | 3,755,263 | 3,718,912 | 7,289,673 | 7,128,408 | |||||||||||
Net realized and unrealized gain/(loss) on investments: | |||||||||||||||
Net realized gain (loss) from investments | 25,285 | 75,000 | 56,358 | (183,192) | |||||||||||
Net change in unrealized appreciation (depreciation) in value | |||||||||||||||
of investments | (813,105) | (13,176,208) | (5,285,140) | (14,899,471) | |||||||||||
Total realized and unrealized gain (loss) on investments | (787,820) | (13,101,208) | (5,228,782) | (15,082,663) | |||||||||||
Net increase (decrease) in net assets resulting from operations | |||||||||||||||
$ | 2,967,443 | $ | (9,382,296) | $ | 2,060,891 | $ | (7,954,255) | ||||||||
Basic and diluted: | |||||||||||||||
Net investment income per share | $ | 0.27 | $ | 0.25 | $ | 0.53 | $ | 0.52 | |||||||
Earnings per share | $ | 0.22 | $ | (0.69) | $ | 0.15 | $ | (0.58) | |||||||
Weighted average shares of common stock outstanding | 13,668,027 | 13,638,869 | 13,646,653 | 13,644,483 | |||||||||||
Distributions paid per common share | $ | 0.25 | $ | 0.25 | $ | 0.50 | $ | 0.50 | |||||||
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 Credit Management BDC, Inc.
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