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

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NEW YORK, Feb. 10, 2020 /PRNewswire/ -- Investcorp Credit Management BDC, Inc. (NASDAQ: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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