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10.05.2021 22:56:00
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Investcorp Credit Management BDC, Inc. Announces Financial Results for the Quarter Ended March 31, 2021 and Quarterly and Supplemental Distributions
NEW YORK, May 10, 2021 /PRNewswire/ -- Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) ("ICMB" or the "Company") announced its financial results today for its fiscal third quarter ended March 31, 2021.
HIGHLIGHTS
- On May 6, 2021, the Company's Board declared a distribution for the quarter ending June 30, 2021 of $0.15 per share, payable on July 9, 2021, to stockholders of record as of June 18, 2021.
- ICMB made two investments in new portfolio companies. These investments totaled $14.8 million. The weighted average yield of debt investments made in the quarter was 8.51%.
- ICMB fully realized four investments during the quarter, totaling $17.9 million, and received additional partial repayments totaling $4.1 million.
- The weighted average yield on debt investments, at cost, decreased 99 basis points to 8.77%, compared to 9.76% as of December 31, 2020.
- Net asset value ("NAV") increased $0.09 per share to $7.93, compared to $7.84 as of December 31, 2020. The net assets increased by $1.2 million or 1.13% for the quarter ended March 31, 2021.
- On March 31, 2021, the Company closed the public offering of $65.0 million in aggregate principal amount of 4.875% notes due 2026.
- On April 25, 2021, the Company redeemed the $51.4 million principal amount of the 2023 Notes with an interest rate of 6.125% at 100% of their principal amount, plus the accrued and unpaid interest.
Portfolio results, as of March 31, 2021: | |
Total assets | $347.3mm |
Investment portfolio, at fair value | $251.8mm |
Net assets | $110.3mm |
Weighted average yield on debt investments, at cost | 8.77% |
Net asset value per share | $7.93 |
Portfolio activity in the current quarter: | |
Number of new investments | 2 |
Total capital invested | $14.8mm |
Proceeds from repayments, sales, and amortization | $24.0mm |
Number of portfolio companies, end of period | 35 |
Net investment income (NII) | $1.8mm |
Net investment income per share | $0.13 |
Net increase in net assets from operations | $3.7mm |
Net increase in net assets from operations per share | $0.27 |
Quarterly per share distribution paid on April 1, 2021 | $0.18 |
Mr. Michael C. Mauer, the Company's Chief Executive Officer, said "We are very pleased with the overall performance of our portfolio companies. Companies have adapted to operating in the COVID environment over the short term. Most of those affected are showing signs of a true recovery during the first quarter."
The Company's dividend framework provides a quarterly base dividend and is supplemented (when available) by additional dividends determined by the net investment income during the quarter.
On May 6, 2021, the Company's Board of Directors (the "Board") declared a distribution for the quarter ending June 30, 2021 of $0.15 per share, payable on July 9, 2021, to stockholders of record as of June 18, 2021.
This distribution represents a 10.26% yield on the Company's $5.85 share price as of market close on May 7, 2021. Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect these distributions 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 two investments in new portfolio companies. The aggregate capital invested during the quarter totaled $14.8 million, at cost, and the new debt investments were made at a weighted average yield of 8.51%.
The Company received proceeds of $24.0mm from repayments, sales and amortization during the quarter, primarily related to the realizations of Limbach Holdings, Inc., BW Gas & Convenience, and Empire Resorts, Inc.
The Company's realized and unrealized gains and losses accounted for an increase in the Company's net investments of $1.9 million, or $0.13 per share. The total net increase in net assets resulting from operations for the quarter was $3.7 million, or $0.27 per share.
As of March 31, 2021, the Company's investment portfolio consisted of investments in 35 portfolio companies, of which 87.0% were first lien investments, 4.6% were second lien investments, 4.8% were unitranche loans, and 3.6% were equity, warrants, and other investments. The Company's debt portfolio consisted of 99.3% floating rate investments and 0.7% fixed rate investments.
Notes due 2026
On March 31, 2021, the Company closed the public offering of $65.0 million in aggregate principal amount of 4.875% notes due 2026 (the "2026 Notes"). The total net proceeds to the Company from the 2026 Notes after deducting underwriting discounts and commissions of approximately $1.3 million and estimated offering expenses of approximately $215,000, were approximately $63.1 million.
COVID-19 Developments
During the nine months ended March 31, 2021, the Company's portfolio was negatively affected by the economic uncertainty caused by the novel coronavirus ("COVID-19") pandemic. The Company has closely monitored its portfolio companies throughout this period, including assessing portfolio companies' operational and liquidity exposure and outlook. Though the magnitude of the impact remains to be seen, certain of the Company's portfolio companies and, by extension, select operating results have been, and may continue to be, adversely impacted by the COVID-19 pandemic. For additional information about the COVID-19 pandemic and its potential impact on the Company's results of operations and financial condition, please refer to the disclosure in the Company's Form 10-Q for the quarter ended March 31, 2021.
Capital Resources
As of March 31, 2021, the Company had $86.4 million in cash, of which $6.5 million was in restricted cash and $20.0 million of capacity under its revolving credit facility with UBS AG, London Branch.
Subsequent Events
Subsequent to March 31, 2021 and through May 7, 2021, the Company invested $12.4 million in two new portfolio companies and received $23.1 million in repayments. As of May 7, 2021, the Company had 36 portfolio companies.
On April 25, 2021, the Company redeemed in full all $51,375,000 in aggregate principal amount of its 6.125% notes due 2023 (the "2023 Notes") at 100% of their principal amount ($25 per 2023 Note), plus the accrued and unpaid interest thereon from April 1, 2021, through, but excluding, April 25, 2021.
Investcorp Credit Management BDC, Inc. and Subsidiaries | |||||||
Consolidated Statements of Assets and Liabilities | |||||||
March 31, 2021 | |||||||
(Unaudited) | June 30, 2020 | ||||||
Assets | |||||||
Non-controlled, non-affiliated investments, at fair value (amortized cost of | $ | 251,804,495 | $ | 270,621,709 | |||
$292,472,716 and $ 316,924,638, respectively) | |||||||
Cash | 79,910,418 | 14,876,444 | |||||
Cash, restricted | 6,544,038 | 5,417,118 | |||||
Receivable for investments sold | 5,788,673 | 1,576,730 | |||||
Interest receivable | 2,015,469 | 2,301,641 | |||||
Payment-in-kind interest receivable | 198,786 | 514,643 | |||||
Other receivables | 427,208 | 1,135,563 | |||||
Prepaid expenses and other assets | 575,421 | 350,661 | |||||
Total Assets | $ | 347,264,508 | $ | 296,794,509 | |||
Liabilities | |||||||
Notes payable: | |||||||
Term loan | $ | 102,000,000 | $ | 102,000,000 | |||
Revolving credit facility | - | 30,000,000 | |||||
2023 Notes payable | 51,375,000 | 51,375,000 | |||||
2026 Notes payable | 65,000,000 | - | |||||
Deferred debt issuance costs | (2,083,458) | (1,042,497) | |||||
Unamortized discount | (355,550) | - | |||||
Notes payable, net | 215,935,992 | 182,332,503 | |||||
Payable for investments purchased | 14,810,000 | - | |||||
Dividend payable | 2,504,677 | 2,499,360 | |||||
Income-based incentive fees payable | 649,122 | 707,796 | |||||
Base management fees payable | 1,075,820 | 1,196,937 | |||||
Interest payable | 950,594 | 1,000,452 | |||||
Directors' fees payable | 25,734 | 24,559 | |||||
Accrued expenses and other liabilities | 1,012,589 | 907,907 | |||||
Total Liabilities | 236,964,528 | 188,669,514 | |||||
Commitments and Contingencies (Note 6) | |||||||
Net Assets | |||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized, | |||||||
13,914,872 and 13,885,335 shares issued and outstanding, respectively) | 13,915 | 13,885 | |||||
Additional paid-in capital | 200,885,428 | 200,779,949 | |||||
Distributable earnings (loss) | (90,599,363) | (92,668,839) | |||||
Total Net Assets | 110,299,980 | 108,124,995 | |||||
Total Liabilities and Net Assets | $ | 347,264,508 | $ | 296,794,509 | |||
Net Asset Value Per Share | $ | 7.93 | $ | 7.79 | |||
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 nine months ended | |||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||
Investment Income: | ||||||||||||||
Interest income | $ | 5,386,448 | $ | 7,599,834 | $ | 17,297,387 | $ | 22,912,000 | ||||||
Payment in-kind interest income | 541,625 | 916,303 | 2,273,369 | 3,278,294 | ||||||||||
Other fee income | 82,214 | 313,543 | 498,278 | 629,269 | ||||||||||
Total investment income | 6,010,287 | 8,829,680 | 20,069,034 | 26,819,563 | ||||||||||
Expenses: | ||||||||||||||
Interest expense | 1,657,005 | 2,532,121 | 5,476,505 | 7,417,144 | ||||||||||
Base management fees | 1,160,047 | 1,359,833 | 3,570,259 | 4,084,894 | ||||||||||
Income-based incentive fees | - | (19,370) | - | 832,472 | ||||||||||
Provision for tax expense | 263,103 | 135,024 | 268,883 | 145,042 | ||||||||||
Professional fees | 372,475 | 394,868 | 1,011,925 | 1,094,828 | ||||||||||
Allocation of administrative costs from advisor | 356,500 | 352,000 | 1,064,500 | 1,034,000 | ||||||||||
Amortization of deferred debt issuance costs | - | 195,377 | - | 586,131 | ||||||||||
Insurance expense | 116,818 | 100,044 | 333,190 | 267,567 | ||||||||||
Directors' fees | 78,625 | 82,500 | 233,875 | 187,500 | ||||||||||
Custodian and administrator fees | 62,680 | 74,637 | 192,429 | 282,106 | ||||||||||
Offering expense | 86,906 | 86,906 | 259,039 | 224,260 | ||||||||||
Other expenses | 119,735 | 156,428 | 364,835 | 433,288 | ||||||||||
Total expenses | 4,273,894 | 5,450,368 | 12,775,440 | 16,589,232 | ||||||||||
Waiver of base management fees | (84,227) | (63,797) | (291,557) | (165,832) | ||||||||||
Waiver of income-based incentive fees | - | (352) | - | (336,971) | ||||||||||
Net expenses | 4,189,667 | 5,386,219 | 12,483,883 | 16,086,429 | ||||||||||
Net investment income | 1,820,621 | 3,443,461 | 7,585,151 | 10,733,134 | ||||||||||
Net realized and unrealized gain/(loss) on investments: | ||||||||||||||
Net realized gain (loss) from investments | (3,645,094) | (7,688,552) | (3,641,401) | (7,632,194) | ||||||||||
Net change in unrealized appreciation (depreciation) in value | ||||||||||||||
of investments | 5,522,809 | (19,999,276) | 5,634,708 | (25,284,416) | ||||||||||
Total realized and unrealized gain (loss) on investments | 1,877,715 | (27,687,828) | 1,993,307 | (32,916,610) | ||||||||||
Net increase (decrease) in net assets resulting from operations | ||||||||||||||
$ | 3,698,336 | $ | (24,244,367) | $ | 9,578,458 | $ | (22,183,476) | |||||||
Basic and diluted: | ||||||||||||||
Net investment income per share | $ | 0.13 | $ | 0.25 | $ | 0.55 | $ | 0.78 | ||||||
Earnings per share | $ | 0.27 | $ | (1.76) | $ | 0.69 | $ | (1.62) | ||||||
Weighted average shares of common stock outstanding | 13,914,351 | 13,791,581 | 13,904,344 | 13,694,611 | ||||||||||
Distributions paid per common share | $ | 0.18 | $ | 0.25 | $ | 0.54 | $ | 0.75 | ||||||
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 in this press release may contain "forward-looking statements," which relate to future performance or financial condition, are based upon current expectations and are inherently uncertain. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company's control and including the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our portfolio companies, our industry and the global economy, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. 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. All forward-looking statements speak only as of the date of this press release. The Company undertakes no duty to update any forward-looking statement made herein except as required by law.
Contacts
Investcorp Credit Management BDC, Inc.
Investor Relations
Email: icmbinvestorrelations@investcorp.com
Phone: 212-257-5182
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SOURCE Investcorp Credit Management BDC, Inc.
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