NEW
YORK, Feb. 13, 2023 /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,
2022.
HIGHLIGHTS
- On February 2, 2023, the
Company's Board of Directors (the "Board") declared a distribution
of $0.13 per share for the quarter
ending March 31, 2023, payable in
cash on March 30, 2023, to
stockholders of record as of March 10,
2023 and a supplemental distribution of $0.02 per share, payable on March 30, 2023, to stockholders of record as of
March 10, 2023.
- During the quarter, ICMB made investments in one portfolio
company. These investments totaled $2.5
million, at cost. The weighted average yield (at
origination) of debt investments made in the quarter was
10.63%.
- ICMB fully realized one portfolio company during the
quarter, totaling $11.4 million in
proceeds. The internal rate of return on these investments was
11.42%.
- During the quarter, the Company had net advances of
$3.7 million on its existing delayed
draw and revolving credit commitments to portfolio
companies.
- The weighted average yield on debt investments, at cost, for
the quarter ended December 31, 2022,
was 10.73%, compared to 11.91% for the quarter ended September 30, 2022.
- Net asset value decreased $0.11 per share to $6.36, compared to $6.47 as of September 30,
2022. Net assets decreased by $1.5
million, or 1.7%, during the quarter ended December 31, 2022.
|
Portfolio results, as
of and for the three months ended December 31, 2022:
|
|
Total assets
|
$239.4mm
|
|
Investment portfolio,
at fair value
|
$228.6mm
|
|
Net assets
|
$91.5mm
|
|
Weighted average yield
on debt investments, at cost (1)
|
10.73 %
|
|
Net asset value per
share
|
$6.36
|
|
Portfolio activity in
the current quarter:
|
|
|
Number of new
investments
|
3
|
|
Total capital
invested
|
$6.2mm
|
|
Proceeds from
repayments, sales, and amortization
|
$14.2mm
|
|
Number of portfolio
companies, end of period
|
37
|
|
Net investment income
(NII)
|
$2.3mm
|
|
Net investment income
per share
|
$0.16
|
|
Net increase in net
assets from operations
|
$0.6mm
|
|
Net increase in net
assets from operations per share
|
$0.04
|
|
Quarterly per share
distribution paid on January 10, 2023
|
$0.15
|
|
|
(1) Represents weighted
average yield on total debt investments for the three months ended
December 31, 2022. Weighted average yield on total debt investments
is the annualized rate of interest income recognized during the
period divided by the average amortized cost of debt investments in
the portfolio during the period. The weighted average yield on
total debt investments reflected above does not represent actual
investment returns to the Company's stockholders.
|
Mr. Michael C. Mauer, the
Company's Chief Executive Officer, said, "We continue to see market
volatility and inflationary pressures across the borrower
universe. We have responded with a cautious and deliberate
approach to capital deployment, with an emphasis on first lien
structures, covenants, and significant equity contributions below
us. There remains a stable flow, albeit at a slow pace, of
conservative opportunities with attractive structures and returns
to consider."
The Company's dividend framework provides a quarterly base
dividend and may be supplemented, at the discretion of the Board,
by additional dividends as determined to be available by the
Company's net investment income and performance during the
quarter.
On February 2, 2023, the Board
declared a distribution for the quarter ended March 31, 2023 of $0.13 per share payable on March 30, 2023 to stockholders of record as of
March 10, 2023 and a supplemental
distribution of $0.02 per share,
payable on March 30, 2023, to
stockholders of record as of March 10,
2023.
This distribution represents a 17.05% yield on the Company's
$3.52 share price as of market close
on December 31, 2022. Distributions
may include net investment income, capital gains and/or return of
capital, however, the Company does not expect the dividend for the
quarter ending December 31, 2022, to
be comprised of a return of capital. The Company's investment
adviser monitors available taxable earnings, including net
investment income and realized capital gains, to determine if a
return of capital may occur for the year. The Company estimates the
source of its distributions as required by Section 19(a) of the
Investment Company Act of 1940 to determine whether payment of
dividends are expected to be paid from any other source other than
net investment income accrued for the current period or certain
cumulative periods, but the Company will not be able to determine
whether any specific distribution will be treated as taxable
earnings or as a return of capital until after the end of the
taxable year.
Portfolio and Investment Activities
During the quarter, the Company made investments in one new
portfolio company. The aggregate capital invested during the
quarter totaled $2.5 million, at
cost, and the debt investments were made at a weighted average
yield of 10.63%.
The Company received proceeds of $14.2
million from repayments, sales and amortization during the
quarter, primarily related to the realization of Barri Financial
Group, LLC.
During the quarter, the Company had net advances of $3.7 million on its existing and new delayed draw
and revolving credit commitments to portfolio companies.
The Company's net realized, and unrealized gains and losses
accounted for a decrease in the Company's net investments of
$1.7 million, or $0.12 per share. The total net increase in net
assets resulting from operations for the quarter was $0.6 million, or $0.04 per share.
As of December 31, 2022, the
Company's investment portfolio consisted of investments in 37
portfolio companies, of which 91.0% were first lien investments and
9.0% were equity, warrants, and other investments. The Company's
debt portfolio consisted of 99.5% floating rate investments and
0.5% fixed rate investments.
The Company continues to assess the impact of the COVID-19
pandemic on its portfolio companies and will continue to closely
monitor its portfolio companies throughout this period, including
assessing portfolio companies' operational and liquidity exposure
and outlook. 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 quarterly report on Form 10-Q for the quarter ended
December 31, 2022, filed with the
Securities and Exchange Commission on February 13, 2023.
Capital Resources
As of December 31, 2022, the
Company had $8.4 million in cash, of
which $7.9 million was restricted
cash, and $36.6 million unused
capacity under its revolving credit facility with Capital One,
N.A.
Subsequent Events
Subsequent to December 31, 2022
and through February 13, 2023, the
Company invested a total of $5.5
million, which included investments in one existing and one
new portfolio company. As of February 13,
2022, the Company had investments in 37 portfolio
companies.
|
Investcorp Credit
Management BDC, Inc. and Subsidiaries
|
|
Consolidated
Statements of Assets and Liabilities
|
|
|
December 31,
2022
(Unaudited)
|
June 30,
2022
|
|
Assets
|
|
|
|
Non-controlled,
non-affiliated investments, at fair value (amortized cost of
$251,161,598 and $254,172,763,
respectively)
|
$
217,912,382
|
$
223,037,183
|
|
Affiliated investments,
at fair value (amortized cost of $23,726,516 and $23,395,242,
respectively)
|
10,681,276
|
10,646,803
|
|
Total investments, at
fair value (amortized cost of $274,888,114 and $277,568,005,
respectively)
|
228,593,658
|
233,683,986
|
|
Cash
|
553,186
|
2,550,021
|
|
Cash,
restricted
|
7,884,674
|
6,605,056
|
|
Receivable for
investments sold
|
301,677
|
835,043
|
|
Interest
receivable
|
1,919,396
|
2,298,443
|
|
Payment-in-kind
interest receivable
|
16,927
|
2,137
|
|
Prepaid expenses and
other assets
|
90,899
|
410,401
|
|
|
|
|
Total
Assets
|
$
239,360,417
|
$
246,385,087
|
|
|
|
|
Liabilities
|
|
|
|
Notes
payable:
|
|
|
|
Revolving credit
facility
|
$ 78,400,000
|
$
84,000,000
|
|
2026 Notes
payable
|
65,000,000
|
65,000,000
|
|
Deferred debt issuance
costs
|
(1,567,222)
|
(1,913,889)
|
|
Unamortized
discount
|
(231,108)
|
(266,663)
|
|
|
|
|
Notes payable,
net
|
141,601,670
|
146,819,448
|
|
Payable for investments
purchased
|
—
|
246,984
|
|
Dividend
payable
|
2,158,268
|
2,157,872
|
|
Income-based incentive
fees payable
|
34,950
|
182,095
|
|
Base management fees
payable
|
944,623
|
1,054,063
|
|
Interest
payable
|
2,160,160
|
1,574,356
|
|
Directors' fees
payable
|
22,005
|
20,780
|
|
Accrued expenses and
other liabilities
|
961,106
|
820,097
|
|
|
|
|
Total
Liabilities
|
147,882,782
|
152,875,695
|
|
|
|
|
|
|
|
|
|
|
Net
Assets
|
|
|
|
Common stock, par value
$0.001 per share (100,000,000 shares authorized, 14,388,456
and 14,385,810 shares issued and outstanding,
respectively)
|
14,389
|
14,386
|
|
Additional paid-in
capital
|
203,600,310
|
203,590,126
|
|
Distributable earnings
(loss)
|
(112,137,064)
|
(110,095,120)
|
|
|
|
|
Total Net
Assets
|
91,477,635
|
93,509,392
|
|
|
|
|
Total Liabilities
and Net Assets
|
$
239,360,417
|
$
246,385,087
|
|
|
|
|
Net Asset Value Per
Share
|
$
6.36
|
$
6.50
|
|
|
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,
|
|
2022
|
2021
|
2022
|
2021
|
|
Investment
Income:
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
$
6,260,515
|
$
6,021,868
|
$
11,869,627
|
$
11,944,764
|
|
Affiliated
investments
|
—
|
40,437
|
(20,611)
|
121,319
|
|
|
|
|
|
|
Total interest
income
|
6,260,515
|
6,062,305
|
11,849,016
|
12,066,083
|
|
Payment in-kind
interest income
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
189,626
|
21,234
|
520,809
|
37,464
|
|
Affiliated
investments
|
17,443
|
89,285
|
34,447
|
152,169
|
|
|
|
|
|
|
Total payment-in-kind
interest income
|
207,069
|
110,519
|
555,256
|
189,633
|
|
Dividend
income
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
101,755
|
—
|
101,755
|
—
|
|
Affiliated
investments
|
—
|
—
|
—
|
296,126
|
|
Total dividend
income
|
101,755
|
—
|
101,755
|
296,126
|
|
Total payment-in-kind
interest income
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
210,578
|
36,695
|
572,428
|
140,228
|
|
Affiliated
investments
|
—
|
759
|
—
|
1,510
|
|
|
|
|
|
|
Total other fee
income
|
210,578
|
37,454
|
572,428
|
141,738
|
|
|
|
|
|
|
Total investment
income
|
6,779,917
|
6,210,278
|
13,078,455
|
12,693,580
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Interest
expense
|
2,160,336
|
1,790,513
|
3,952,344
|
3,532,083
|
|
Base management
fees
|
1,057,104
|
1,123,105
|
2,161,085
|
2,251,609
|
|
Income-based incentive
fees
|
—
|
—
|
(147,145)
|
—
|
|
Provision for tax
expense
|
65,858
|
27,960
|
110,188
|
27,960
|
|
Professional
fees
|
271,782
|
301,970
|
543,563
|
605,759
|
|
Allocation of
administrative costs from advisor
|
375,900
|
351,700
|
751,800
|
703,400
|
|
Amortization of
deferred debt issuance costs
|
173,334
|
173,333
|
346,667
|
274,444
|
|
Amortization of
original issue discount – 2026 Notes
|
17,778
|
17,778
|
35,555
|
35,555
|
|
Insurance
expense
|
137,820
|
121,134
|
275,641
|
242,268
|
|
Directors'
fees
|
75,625
|
75,625
|
151,250
|
151,250
|
|
Custodian and
administrator fees
|
71,828
|
72,512
|
143,516
|
147,844
|
|
Other
expenses
|
136,334
|
158,999
|
275,815
|
314,855
|
|
|
|
|
|
|
Total
expenses
|
4,543,699
|
4,214,629
|
8,600,279
|
8,287,027
|
|
Waiver of base
management fees
|
(112,481)
|
(106,878)
|
(206,627)
|
(223,814)
|
|
Waiver of income-based
incentive fees
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
Net
expenses
|
4,431,218
|
4,107,751
|
8,393,652
|
8,063,213
|
|
|
|
|
|
|
Net investment
income
|
2,348,699
|
2,102,527
|
4,684,803
|
4,630,367
|
|
|
|
|
|
|
Net realized and
unrealized gain/(loss) on investments:
|
|
|
|
|
|
Net realized gain
(loss) from investments
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
—
|
(348,351)
|
—
|
413,112
|
|
Affiliated
investments
|
—
|
(8,196,669)
|
—
|
(8,196,669)
|
|
|
|
|
|
|
Net realized gain
(loss) from investments
|
—
|
(8,545,020)
|
—
|
(7,783,557)
|
|
Net change in
unrealized appreciation (depreciation) in value of
investments
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
(1,649,361)
|
1,591,986
|
(2,113,636)
|
2,468,568
|
|
Aaffiliated
investments
|
(82,479)
|
8,300,406
|
(296,801)
|
7,420,969
|
|
|
|
|
|
|
Net change in
unrealized appreciation (depreciation) on investments
|
(1,731,840)
|
9,892,392
|
(2,410,437)
|
9,889,537
|
|
|
|
|
|
|
Total realized gain
(loss) and change in unrealized appreciation
(depreciation) on investments
|
(1,731,840)
|
1,347,372
|
(2,410,437)
|
2,105,980
|
|
|
|
|
|
|
Net increase
(decrease) in net assets resulting from operations
|
$ 616,859
|
$
3,449,899
|
$
2,274,366
|
$
6,736,347
|
|
|
|
|
|
|
Basic and
diluted:
|
|
|
|
|
|
Net investment income
per share
|
$
0.16
|
$
0.15
|
$
0.33
|
$
0.33
|
|
Earnings per
share
|
$
0.04
|
$
0.24
|
$
0.16
|
$
0.47
|
|
Weighted average
shares of common stock outstanding
|
14,388,242
|
14,384,025
|
14,387,526
|
14,225,197
|
|
Distributions paid
per common share
|
$
0.15
|
$
0.15
|
$
0.30
|
$
0.30
|
|
|
See notes to
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 in this press release and made on the
earnings call for the quarter ended December
31, 2022, may contain "forward-looking statements," which
relate to future performance, operating results, events and/or
financial condition. Words such as "anticipates," "expects,"
"intends," "plans," "will," "may," "continue," "believes," "seeks,"
"estimates," "would," "could," "should," "targets," "projects," and
variations of these words and similar expressions are intended to
identify forward-looking statements. Any forward-looking
statements, including statements other than statements of
historical facts, included in this press release or made on the
earnings call are based upon current expectations, are inherently
uncertain, and involve a number of assumptions and substantial
risks and uncertainties, many of which are difficult to predict and
are generally beyond the Company's control.
Investors are cautioned not to place undue reliance on these
forward-looking statements. Any such statements are likely to be
affected by other unknowable future events and conditions, which
the Company may or may not have considered, including, without
limitation, the impact of the COVID-19 pandemic, changes in base
interest rates and the effects of significant market volatility on
our business, our portfolio companies, our industry and the global
economy. Accordingly, such statements cannot be guarantees or
assurances of any aspect of future performance or events. Actual
results may differ materially from those anticipated in any
forward-looking statements as a result of a number of factors and
risks. More information on these risks and other potential factors
that could affect actual events and the Company's performance and
financial results, including important factors that could cause
actual results to differ materially from plans, estimates or
expectations included herein or discussed on the earnings call, is
or will be included in the Company's filings with the Securities
and Exchange Commission, including in the "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of the Company's Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. All
forward-looking statements speak only as of the date they are made.
The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by law.
Contacts
Investcorp Credit Management BDC, Inc.
Investor Relations
Email: icmbinvestorrelations@investcorp.com
Phone: (646) 690-5034
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SOURCE Investcorp Credit Management BDC
