Market Overview

BlackRock Capital Investment Corporation Reports Financial Results for the Quarter Ended June 30, 2018, Declares Quarterly Distribution of $0.18 per Share

Share:
  • GAAP Net Investment Income (NII) of $0.16 per share providing second
    quarter distribution coverage of 90%
  • Net Asset Value (NAV) per share declined 1.2% or $0.09 per share to
    $7.56 per share on a quarter-over-quarter basis primarily due to
    increase in net unrealized and realized depreciation on legacy assets
  • Under our existing share repurchase program, we repurchased 1,268,684
    shares of common stock for $7.9 million, including brokerage
    commissions, via open market purchases in the second quarter
  • Net leverage of 0.43x was down, reflecting an increase in prepayment
    activity. Total liquidity for portfolio company investments, including
    cash, was approximately $280 million, subject to leverage and
    borrowing base restrictions
  • BCIC Senior Loan Partners increases its investment capacity from $300
    million to $400 million

BlackRock Capital Investment Corporation (NASDAQ:BKCC) ("BCIC" or the
"Company," "we," "us" or "our") announced today that its Board of
Directors declared a quarterly distribution of $0.18 per share, payable
on October 8, 2018 to stockholders of record at the close of business on
September 17, 2018.

"We continued to execute upon our disciplined deployment strategy in the
second quarter, adding two new portfolio companies to our balance sheet
as well as making incremental investments in four existing portfolio
companies including BCIC Senior Loan Partners ("Senior Loan Partners").
We saw multiple exits during the quarter driving the decrease in net
leverage from 0.56x to 0.43x quarter-over quarter. Additionally, the
reduction in NAV that we experienced was mainly due to markdowns on
certain legacy investments. Under BlackRock's management of BCIC, from
March 6, 2015 to June 30, 2018, we have deployed $860 million of
capital, of which $290 million has been exited with a realized IRR of
13.8%" commented James E. Keenan, Chairman and Interim CEO of BlackRock
Capital Investment Corporation.

"In the current market conditions of compressed credit spreads, higher
leverage levels and weaker structures, we remain highly selective in new
investment opportunities and focused on opportunities with strong
underlying credit metrics. Additionally, our portfolio investments in
Senior Loan Partners and Gordon Brothers Finance Company continue to
provide us with exposure to assets at the top of the capital structure.
Senior Loan Partners upsized its committed equity base as well as
refinanced and upsized its credit facility expanding its investable
capacity from $300 million to $400 million.

"Under our existing share repurchase program, during the quarter, we
invested approximately $7.9 million in share repurchases at an average
price of $6.21 per share. With liquidity at $280 million and no debt
maturities until 2022, we have significant operating flexibility and
deployment capacity."

Financial Highlights

  Q2 2018   Q1 2018   Q2 2017
Total   Per   Total   Per   Total   Per
($'s in millions, except per share data)   Amount   Share   Amount   Share   Amount   Share
 
Net Investment Income $   11.5 $   0.16 $   11.6 $   0.16 $   13.9 $  

0.19

 

Net realized and unrealized gains/(losses) $ (5.5 ) $ (0.08 ) $ (12.5 ) $ (0.17 ) $ 3.1 $ 0.04
Deferred taxes $ (1.8 ) $ (0.02 )
Basic earnings/(loss) $ 4.2 $ 0.06 $ (0.9 ) $ (0.01 ) $ 17.0 $ 0.23
Distributions declared $ 12.8 $ 0.18 $ 13.2 $ 0.18 $ 13.1 $ 0.18
Net Investment Income/(loss), as adjusted1 $ 11.5 $ 0.16 $ 11.6 $ 0.16 $ 13.9 $ 0.19

Basic earnings/(loss), as adjusted1

  $   4.2     $   0.06     $   (0.9 )   $   (0.01 )   $   17.0   $   0.23  
 
  June 30,   March 31,   December 31,   June 30,
($'s in millions, except per share data)  

2018

 

2018

 

2017

 

2017

 
Total assets $   800.0 $   887.1 $   799.9 $   925.0
Investment portfolio, at fair market value $ 776.3 $ 870.1 $ 757.9 $ 893.3
Debt outstanding $ 241.5 $ 310.1 $ 206.7 $ 295.5
Total net assets $ 536.6 $ 553.1 $ 571.1 $ 607.5
Net asset value per share $ 7.56 $ 7.65 $ 7.83 $ 8.33

Net leverage ratio2

  0.43x     0.56x     0.32x     0.47x  
 

Business Updates

  • Under our existing share repurchase program, during the second quarter
    of 2018, 1,268,684 shares were repurchased for $7.9 million at an
    average price of $6.21 per share, including brokerage commissions. The
    cumulative repurchases since BlackRock entered into the investment
    management agreement with the Company in early 2015 totaled
    approximately 5.1 million shares for $38.1 million, representing 75.6%
    of total share repurchase activity, on a dollar basis. Since the
    inception of our share repurchase program through June 30, 2018, we
    have purchased 6.8 million shares at an average price of $7.36 per
    share, including brokerage commissions, for a total of $50.4 million.
    In May 2017, our Board of Directors approved an increase to the
    remaining amount of shares authorized to be repurchased to a total of
    2.5 million shares effective July 1, 2017, and an extension to the
    plan until the earlier of June 30, 2018 or such time that all of the
    authorized shares have been repurchased. In April 2018, our Board of
    Directors authorized a total of 2.5 million shares for repurchase,
    effective July 1, 2018 until the earlier of June 30, 2019 or until
    such time that all of the authorized shares have been repurchased.
  • Subsequent to the quarter ended June 30, 2018, Senior Loan Partners,
    as Servicer, and its wholly-owned subsidiary BCIC Senior Loan Funding
    II, LLC (a newly formed entity), as Borrower, entered into a $270
    million Loan and Servicing Agreement with Morgan Stanley Senior
    Funding, Inc. acting as Administrative Agent and The Bank of New York
    Mellon Trust Company acting as Collateral Agent. Proceeds from this
    credit facility refinanced the outstanding balances under the existing
    $200 million credit facility to BCIC Senior Loan Funding, LLC (a
    wholly-owned subsidiary of Senior Loan Partners). As previously
    disclosed, on April 16, 2018, the Company increased its equity
    commitment in Senior Loan Partners from $85.0 million to $113.3
    million. Concurrently, Windward Investments LLC, our joint venture
    partner, increased their equity commitment in a pro rata manner from
    $15.0 million to $20.0 million. With the increase in the size of
    equity commitments and the credit facility, the investing capacity of
    Senior Loan Partners has increased from $300 million to approximately
    $400 million.

_______________________________
1 Non-GAAP basis
financial measure. See Supplemental Information on page 8.
2
Calculated as the ratio between (A) debt, excluding unamortized debt
issuance costs, less available cash and receivable for investments sold,
and (B) net asset value.

Portfolio and Investment Activity*

($'s in millions)   Three months   Three months   Three months
ended ended ended
  June 30, 2018   March 31, 2018   June 30, 2017
Investment deployments $ 61.3 $ 144.6 $ 22.8
Investment exits $ 152.1 $ 17.2 $ 72.0
Number of portfolio company investments at the end of period 29 31 34
Weighted average yield of debt and income producing equity
securities, at fair market value
11.5 % 11.3 % 11.3 %
% of Portfolio invested in Secured debt, at fair market value 52 % 59 % 64 %
% of Portfolio invested in Unsecured debt, at fair market value 18 % 16 % 17 %
% of Portfolio invested in Equity, at fair market value 30 % 25 % 19 %
Average investment by portfolio company, at amortized cost
(excluding investments below $5.0 million)
  $ 32.9     $ 33.6     $ 33.0  

*balance sheet amounts above are as of period end

 
  • We deployed $61.3 million during the quarter while exits of
    investments totaled $152.1 million, resulting in a $90.8 million net
    decrease in our portfolio due to investment activity.
    • Our deployments were primarily concentrated in two new portfolio
      company investments, and incremental investments in four existing
      portfolio companies:
      • $14.0 million funded L+7.50% second lien term loan to
        Northstar Financial Services Group, LLC, which is a leading
        provider of technology enabled, web based outsourced practice
        management solutions serving investment advisors;
      • $6.4 million funded and $2.7 million unfunded, L+8.00% second
        lien term loan and second lien delayed draw term loan to
        Pharmalogic Holdings Corp., which is a leading independent
        provider of radiopharmaceuticals with 16 nuclear pharmacies
        throughout the United States;
      • $17.5 million of incremental equity to Senior Loan Partners;
      • $8.3 million of incremental L+11.00% unsecured debt to Gordon
        Brothers Finance Company to fund portfolio growth;
      • $6.2 million of incremental 12.00% unsubordinated debt and
        $1.6 million equity investment in First Boston Construction
        Holdings, LLC; and
      • $5.6 million L+8.00% second lien delayed draw term loan to
        Pathway Partners Vet Management Company, LLC.
    • Our repayments were primarily concentrated in four portfolio
      company exits, two dispositions and one partial repayments:
      • $32.0 million repayment of Pre-paid Legal Services, Inc.,
        second lien term loan;
      • $25.0 million repayment of Tri-Anim Health Services, Inc.,
        second lien term loan;
      • $20.0 million repayment of JLL Pioneer Inc., second lien term
        loan;
      • $7.3 million repayment of ECI Cayman Holdings, LP, limited
        partnership interest;
      • $15.8 million sale at par to a third party of Bankruptcy
        Management Solutions, Inc., first lien term loan;
      • $27.2 million and $5.6 million partial sale at par to a third
        party (as previously disclosed) of our first lien term loan
        and delayed draw term loan, respectively, from St. George
        Warehousing & Trucking Co. of California, Inc.; and
      • $18.7 million partial repayment of our Gordon Brothers Finance
        Company's unsecured debt.
  • Our $92.3 million equity investment in Senior Loan Partners is
    generating a yield of approximately 11%. Senior Loan Partners made
    investments into three new portfolio companies and three existing
    portfolio companies totaling $50.8 million of new capital deployments
    during the quarter, bringing committed and outstanding amounts, at
    par, to $287.2 million and $264.0 million, respectively, and a total
    of 22 borrowers. The three new investments, at par, were (i) a $9.3
    million first lien term loan to New Era Technology, Inc., a provider
    of managed services, cloud, collaboration, data networking, and
    security solutions, (ii) a $15.0 million first lien term loan to Crown
    Paper Group, Inc., an independent, vertically-integrated
    containerboard system company, and (iii) a $9.4 million first lien
    loan to ENC Holding Corporation, an asset-light logistics platform
    providing business process outsourcing services. Additional
    investments in existing portfolio companies primarily include (i)
    additional investment of $8.0 million in first lien and revolving
    loans to NSM Sub Holdings Corp., and (ii) additional investment of
    $4.5 million to Accruent, LLC in first lien and delayed draw loans.
  • As of June 30, 2018, there was one non-accrual investment position,
    representing approximately 0.1% and 1.8% of total debt and preferred
    stock investments, at fair value and cost, respectively, as compared
    to non-accrual investment positions of approximately 3.6% and 14.3% of
    total debt and preferred stock investments at fair value and cost,
    respectively, at December 31, 2017. Our average internal investment
    rating at fair market value at June 30, 2018 was 1.23 as compared to
    1.24 as of the prior quarter end.
  • During the quarter ended June 30, 2018, net realized gain was $3.9
    million, primarily resulting from a gain on the sale of ECI Cayman
    Holdings, LP, partially offset by a loss relating to our investment in
    SVP Worldwide Ltd; net unrealized depreciation increased $9.5 million
    before deferred taxes, primarily due to an increase in unrealized
    depreciation mainly on certain legacy investments, as well as the
    reversal of previously recognized appreciation upon dispositions. For
    the three months ended June 30, 2018, unrealized gains in a
    consolidated taxable subsidiary resulted in a deferred tax liability
    of $1.8 million.

Second Quarter Financial Updates

  • GAAP net investment income ("NII") was $11.5 million, or $0.16 per
    share, for the three months ended June 30, 2018. Relative to
    distributions declared of $0.18 per share, our NII distribution
    coverage was 90% for the quarter.
  • As previously disclosed, our base management fee rate was reduced from
    an annual rate of 2.00% of total assets to 1.75% effective March 7,
    2017. For the quarter ended June 30, 2018, $1.9 million of incentive
    management fees based on income was earned by our investment adviser;
    however, as previously disclosed, any such fees earned until December
    31, 2018 have been waived by our investment adviser. Pursuant to the
    waiver, $11.6 million of incentive management fees have been waived on
    a cumulative basis. During the quarter, there was no accrual for
    incentive management fees based on gains.
  • Tax characteristics of all 2017 distributions were reported to
    stockholders on Form 1099 after the end of the calendar year. Our 2017
    tax distributions of $0.72 per share were comprised of ordinary
    income. Our return of capital distributions totaled $1.96 per share
    from inception to December 31, 2017. At our discretion, we may carry
    forward taxable income in excess of calendar year distributions and
    pay a 4% excise tax on this income. We will accrue excise tax on
    estimated undistributed taxable income as required. There was no
    undistributed taxable income carried forward from 2017. For more
    information on distributions, please refer to Section 19 Notices
    posted within the Distribution History section of our website, as
    necessary.

Liquidity and Capital Resources

  • At June 30, 2018, we had $7.7 million in cash and cash equivalents and
    $271.9 million of availability under our credit facility, subject to
    leverage restrictions, resulting in approximately $279.6 million of
    availability for portfolio company investments.
  • Net leverage, adjusted for available cash, receivables for investments
    sold and unamortized debt issuance costs, was 0.43x at quarter-end,
    and our 317% asset coverage ratio provided the Company with available
    debt capacity under its asset coverage requirements of $287.1 million
    which exceeds the available amount of $279.6 million for portfolio
    company investments. Further, as of quarter-end, 80% of our portfolio
    was invested in qualifying assets, exceeding the 70% regulatory
    requirement of a business development company.

Conference Call

BlackRock Capital Investment Corporation will host a
webcast/teleconference at 10:00 a.m. (Eastern Time) on Thursday, August
2, 2018, to discuss its second quarter 2018 financial results. All
interested parties are welcome to participate. You can access the
teleconference by dialing, from the United States, (800) 263-0877, or
from outside the United States, +1-646-828-8143, shortly before 10:00
a.m. and referencing the BlackRock Capital Investment Corporation
Conference Call (ID Number 2195695). A live, listen-only webcast will
also be available via the Investor Relations section of www.blackrockbkcc.com.
Both the teleconference and webcast will be available for replay by 1:00
p.m. on Thursday, August 2, 2018 and ending at 1:00 p.m. on Thursday,
August 16, 2018. To access the replay of the teleconference, callers
from the United States should dial (888) 203-1112 and callers from
outside the United States should dial +1-719-457-0820 and enter the
Conference ID Number 2195695.

Prior to the webcast/teleconference, an investor presentation that
complements the earnings conference call will be posted to BlackRock
Capital Investment Corporation's website within the Presentations
section of the Investors page (http://www.blackrockbkcc.com/news-and-events/disclaimer).

About BlackRock Capital Investment Corporation

BlackRock Capital Investment Corporation is a business development
company that provides debt and equity capital to middle-market companies.

The Company's investment objective is to generate both current income
and capital appreciation through debt and equity investments. The
Company invests primarily in middle-market companies in the form of
senior and junior secured and unsecured debt securities and loans, each
of which may include an equity component, and by making direct
preferred, common and other equity investments in such companies.

BlackRock Capital Investment Corporation

Consolidated Statements of Assets and Liabilities

(Unaudited)

 
 

June 30,

 

December 31,

   

2018

 

2017

Assets
Investments at fair value:
Non-controlled, non-affiliated investments (cost of $260,738,061 and
$311,938,762)
$   239,623,756 $ 261,683,202
Non-controlled, affiliated investments (cost of $140,400,336 and
$195,354,637)
171,502,210 215,779,077
Controlled investments (cost of $391,542,064 and $321,999,526)     365,144,975       280,478,528  
Total investments at fair value (cost of $792,680,461 and
$829,292,925)
776,270,941 757,940,807
Cash and cash equivalents 7,687,958 29,014,645
Receivable for investments sold 5,366,758 1,344,918
Interest, dividends and fees receivable 7,533,034 8,342,780
Prepaid expenses and other assets     3,118,038       3,236,819  
Total Assets $   799,976,729     $ 799,879,969  
Liabilities
Debt (net of deferred financing costs of $3,699,350 and $4,209,445) $ 241,522,761 $ 206,661,272
Interest and credit facility fees payable 549,902 1,820,971
Distributions payable 12,782,869 13,152,924
Deferred tax liability 1,810,391
Base management fees payable 3,850,899 3,734,655
Payable for investments purchased 479,297
Accrued administrative services 417,215 114,995
Other accrued expenses and payables     2,461,332       2,815,923  
Total Liabilities     263,395,369       228,780,037  
Net Assets
Common stock, par value $.001 per share, 200,000,000 common shares
authorized, 77,861,287 and 77,723,764 issued and 71,015,946 and
72,946,910 outstanding
77,861 77,723
Paid-in capital in excess of par 858,904,233 858,087,822
Undistributed / (Distributions in excess of) net investment income (16,691,741 ) (13,918,838 )
Accumulated net realized loss on investments and extinguishment of
debt
(235,435,820 ) (162,723,790 )
Net unrealized (depreciation), net of tax (19,881,331 ) (72,688,483 )
Treasury stock at cost, 6,845,341 and 4,776,854 shares held     (50,391,842 )     (37,734,502 )
Total Net Assets     536,581,360       571,099,932  
Total Liabilities and Net Assets $   799,976,729     $ 799,879,969  
Net Asset Value Per Share   $   7.56     $ 7.83  
 

BlackRock Capital Investment Corporation

Consolidated Statements of Operations

(Unaudited)

 
  Three months   Three months   Six months Six months
ended ended ended ended
    June 30, 2018   June 30, 2017   June 30, 2018   June 30, 2017
Investment Income:
Non-controlled, non-affiliated investments:
Cash interest income $ 8,180,538 $ 12,249,128 $ 15,324,565 $ 23,533,457
PIK interest income 1,513,528 2,990,916
Cash dividend income 404,781
PIK dividend income 65,943
Fee income   283,501       41,780       748,707       340,677  
Total investment income from non-controlled, non-affiliated
investments
  8,464,039       13,804,436       16,073,272       27,335,774  
Non-controlled, affiliated investments:
Cash interest income 2,908,434 2,522,872 5,123,047 4,987,708
PIK interest income 918,265 690,960 2,115,110
PIK dividend income 191,126 277,119 380,152 466,145
Fee income         63,621       35,000       349,916  
Total investment income from non-controlled, affiliated investments   3,099,560       3,781,877       6,229,159       7,918,879  
Controlled investments:
Cash interest income 5,730,772 3,911,550 10,816,477 9,615,537
PIK interest income 516,747 1,043,953 1,283,213 1,176,434
Cash dividend income 3,490,425 2,111,151 6,617,286 3,508,502
PIK dividend income 731,516
Fee income   3,267             390,325       25,000  
Total investment income from controlled investments   9,741,211       7,066,654       19,838,817       14,325,473  
Other Income         590,429             590,429  
Total investment income   21,304,810       25,243,396       42,141,248       50,170,555  
Expenses:
Base management fees 3,850,899 4,139,347 7,163,268 8,663,204
Incentive management fees 1,921,506 2,773,859 3,656,701 3,583,042
Interest and credit facility fees 3,989,257 5,261,085 7,698,215 9,248,165
Professional fees 618,756 792,283 1,351,920 1,357,393
Administrative services 417,214 303,782 970,978 631,459
Director fees 178,000 145,249 365,000 317,749
Investment advisor expenses 87,500 87,501 175,000 175,001
Other   625,480       644,853       1,256,217       1,342,988  
Total expenses, before incentive management fee waiver   11,688,612       14,147,959       22,637,299       25,319,001  
Incentive management fee waiver   (1,921,506 )     (2,773,859 )     (3,656,701   )   (3,583,042 )
Expenses, net of incentive management fee waiver   9,767,106       11,374,100       18,980,598       21,735,959  
Net Investment Income   11,537,704       13,869,296       23,160,650       28,434,596  
 
Realized and Unrealized Gain (Loss):
Net realized gain (loss):
Non-controlled, non-affiliated investments 3,919,359 8,362 (46,596,597 ) (53,983,599 )
Controlled investments   3,000             (26,115,432 )     2,375,535  
Net realized gain (loss)   3,922,359       8,362       (72,712,029 )     (51,608,064 )
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments (14,549,262 ) (2,697,247 ) 29,141,255 54,003,848
Non-controlled, affiliated investments 13,734,096 6,225,975 15,156,671 3,537,381
Controlled investments (8,511,872 ) (576,287 ) 10,644,672 (3,280,674 )
Foreign currency translation   (151,144 )     145,276       (325,055 )     218,571  
Net change in unrealized appreciation (depreciation)   (9,478,182 )     3,097,717       54,617,543       54,479,126  
Net realized and unrealized gain (loss) before taxes   (5,555,823 )     3,106,079       (18,094,486 )     2,871,062  
Deferred taxes   (1,810,391 )     —-       (1,810,391       —-  
Net realized and unrealized gain (loss) after taxes   (7,366,214 )     3,106,079       (19,904,877 )     2,871,062  
Net Increase (Decrease) in Net Assets Resulting from Operations $ 4,171,490     $ 16,975,375     $ 3,255,773     $ 31,305,658  
Net Investment Income Per Share—basic $ 0.16     $ 0.19     $ 0.32     $ 0.39  
Earnings (Loss) Per Share—basic $ 0.06     $ 0.23     $ 0.05     $ 0.43  
Average Shares Outstanding—basic   71,705,463       72,929,346       72,341,433       72,867,332  
Net Investment Income Per Share—diluted $ 0.16     $ 0.19     $ 0.31     $ 0.38  
Earnings (Loss) Per Share—diluted $ 0.06     $ 0.22     $ 0.05     $ 0.42  
Average Shares Outstanding—diluted   88,699,200       86,187,472       89,335,170       84,454,044  
Distributions Declared Per Share   $ 0.18     $ 0.18     $ 0.36     $ 0.36  
 

Supplemental Information

The Company reports its financial results on a GAAP basis; however,
management believes that evaluating the Company's ongoing operating
results may be enhanced if investors have additional non-GAAP basis
financial measures. Management reviews non-GAAP financial measures to
assess ongoing operations and, for the reasons described below,
considers them to be effective indicators, for both management and
investors, of the Company's financial performance over time. The
Company's management does not advocate that investors consider such
non-GAAP financial measures in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP.

Until March 6, 2017, the Company recorded its liability for incentive
management fees based on income as it became legally obligated to pay
them, based on a hypothetical liquidation at the end of each reporting
period. The Company's obligation to pay incentive management fees with
respect to any fiscal quarter until March 6, 2017 was based on a formula
that reflects the Company's results over a trailing four-fiscal quarter
period ending with the pro-rated period until March 6, 2017. The Company
is legally obligated to pay the amount resulting from the formula less
any cash payments of incentive management fees during the prior three
quarters. The formula's requirement to reduce the incentive management
fee by amounts paid with respect to such fees in the prior three
quarters caused the Company's incentive management fee expense to become
concentrated in the fourth quarter of each year. Management believes
that reflecting incentive management fees throughout the year, as the
related investment income is earned, is an effective measure of the
Company's profitability and financial performance that facilitates
comparison of current results with historical results and with those of
the Company's peers. The Company's "as adjusted" results reflect
incentive management fees based on the formula the Company utilizes for
each trailing four-fiscal quarter period until March 6, 2017, with the
formula applied to each quarter's incremental earnings and without any
reduction for incentive management fees paid during the prior three
quarters. The resulting amount represents an upper limit of each
quarter's incremental incentive management fees that the Company may
become legally obligated to pay at the end of the year. Prior year
amounts are estimated in the same manner. These estimates represent
upper limits because, in any calendar year, subsequent quarters'
investment underperformance could reduce the incentive management fees
payable by the Company with respect to prior quarters' operating
results. After March 6, 2017, incentive management fees based on income
have been calculated for each calendar quarter and are paid on a
quarterly basis if certain thresholds are met. The Company records its
liability for incentive management fees based on capital gains by
performing a hypothetical liquidation at the end of each reporting
period. The accrual of this hypothetical capital gains incentive
management fee is required by GAAP, but it should be noted that a fee so
calculated and accrued is not due and payable until the end of the
measurement period, or every June 30. The incremental incentive
management fees disclosed for a given period are not necessarily
indicative of actual full year results. Changes in the economic
environment, financial markets and other parameters used in determining
such estimates could cause actual results to differ and such differences
could be material. In addition, on March 7, 2017, BlackRock Advisors, in
consultation with the Company's Board of Directors, agreed to waive
incentive fees based on income after March 6, 2017 to December 31, 2018.
BCIA has agreed to honor such waiver. For a more detailed description of
the Company's incentive management fee, please refer to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2017,
on file with the Securities and Exchange Commission ("SEC").

Computations for the periods below are derived from the Company's
financial statements as follows:

 

Three months

 

Three months

 

Six months

 

Six months

ended

ended

ended

ended

   

June 30, 2018

 

June 30, 2017

 

June 30, 2018

 

June 30, 2017

GAAP Basis:
Net Investment Income $

11,537,704

 

$

13,869,296

 

$

23,160,650

 

$

28,434,596

 

Net Investment Income per share 0.16 0.19 0.32 0.39
Addback: GAAP incentive management fee expense based on Gains
Addback: GAAP incentive management fee expense based on Income
Pre-Incentive Fee1:
Net Investment Income $ 11,537,704 $ 13,869,296 $ 23,160,650 $ 28,434,596
Net Investment Income per share 0.16 0.19 0.32 0.39
Less: Incremental incentive management fee expense based on Income
As Adjusted2:
Net Investment Income $ 11,537,704 $ 13,869,296 $ 23,160,650 $ 28,434,596
Net Investment Income per share     0.16       0.19       0.32       0.39  

Note: The Net Investment Income amounts for the three and six months
ended June 30, 2018 are net of incentive management fees based on income
and a corresponding incentive management fee waiver in the amounts of
$1,921,506 and $3,656,701, respectively. For the periods shown, there is
no difference between the GAAP and as adjusted figures; however, there
may be a difference in future periods.

1

 

Pre-Incentive Fee: Amounts are adjusted to remove all
incentive management fees. Such fees are calculated but not
necessarily due and payable at this time.

2

As Adjusted: Amounts are adjusted to remove the incentive
management fee expense based on gains, as required by GAAP, and to
include only the incremental incentive management fee expense
based on Income. Until March 6, 2017, the incremental incentive
management fee was calculated based on the current quarter's
incremental earnings, and without any reduction for incentive
management fees paid during the prior calendar quarters. After
March 6, 2017, incentive management fee expense based on income
has been calculated for each calendar quarter and may be paid on a
quarterly basis if certain thresholds are met. Amounts reflect the
Company's ongoing operating results and reflect the Company's
financial performance over time.

 

Forward-looking statements

This press release, and other statements that BlackRock Capital
Investment Corporation may make, may contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act, with
respect to BlackRock Capital Investment Corporation's future financial
or business performance, strategies or expectations. Forward-looking
statements are typically identified by words or phrases such as "trend,"
"potential," "opportunity," "pipeline," "believe," "comfortable,"
"expect," "anticipate," "current," "intention," "estimate," "position,"
"assume," "outlook," "continue," "remain," "maintain," "sustain,"
"seek," "achieve," and similar expressions, or future or conditional
verbs such as "will," "would," "should," "could," "may" or similar
expressions.

BlackRock Capital Investment Corporation cautions that forward-looking
statements are subject to numerous assumptions, risks and uncertainties,
which may change over time. Forward-looking statements speak only as of
the date they are made, and BlackRock Capital Investment Corporation
assumes no duty to and does not undertake to update forward-looking
statements. Actual results could differ materially from those
anticipated in forward-looking statements and future results could
differ materially from historical performance.

In addition to factors previously disclosed in BlackRock Capital
Investment Corporation's SEC reports and those identified elsewhere in
this press release, the following factors, among others, could cause
actual results to differ materially from forward-looking statements or
historical performance: (1) our future operating results; (2) our
business prospects and the prospects of our portfolio companies; (3) the
impact of investments that we expect to make; (4) our contractual
arrangements and relationships with third parties; (5) the dependence of
our future success on the general economy and its impact on the
industries in which we invest; (6) the financial condition of and
ability of our current and prospective portfolio companies to achieve
their objectives; (7) our expected financings and investments; (8) the
adequacy of our cash resources and working capital, including our
ability to obtain continued financing on favorable terms; (9) the timing
of cash flows, if any, from the operations of our portfolio companies;
(10) the impact of increased competition; (11) the ability of our
investment advisor to locate suitable investments for us and to monitor
and administer our investments; (12) potential conflicts of interest in
the allocation of opportunities between us and other investment funds
managed by our investment advisor or its affiliates; (13) the ability of
our investment advisor to attract and retain highly talented
professionals; (14) changes in law and policy accompanying the new
administration and uncertainty pending any such changes; (15) increased
geopolitical unrest, terrorist attacks or acts of war, which may
adversely affect the general economy, domestic and local financial and
capital markets, or the specific industries of our portfolio companies;
(16) changes and volatility in political, economic or industry
conditions, the interest rate environment, foreign exchange rates or
financial and capital markets; (17) the unfavorable resolution of legal
proceedings; and (18) the impact of changes to tax legislation and,
generally, our tax position.

BlackRock Capital Investment Corporation's Annual Report on Form 10-K
for the year ended December 31, 2017, filed with the SEC identifies
additional factors that can affect forward-looking statements.

Available Information

BlackRock Capital Investment Corporation's filings with the SEC, press
releases, earnings releases and other financial information are
available on its website at www.blackrockbkcc.com.
The information contained on our website is not a part of this press
release.

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