Investcorp Credit Management BDC, Inc. Reports Results for its Fiscal Second Quarter Ended December 31, 2019

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.

(PRNewsfoto/Investcorp)

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

December 31,

For the six months ended

 December 31,











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

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/investcorp-credit-management-bdc-inc-reports-results-for-its-fiscal-second-quarter-ended-december-31-2019-301002239.html

SOURCE Investcorp Credit Management BDC, Inc.

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