NEW
YORK, May 15, 2023 /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,
2023.
HIGHLIGHTS
- On May 4, 2023, the Company's
Board of Directors (the "Board") declared a distribution of
$0.13 per share for the quarter
ending June 30, 2023, payable in cash
on July 7, 2023, to stockholders of
record as of June 16, 2023 and a
supplemental distribution of $0.05
per share, payable on July 7, 2023,
to stockholders of record as of June 16,
2023.
- During the quarter, ICMB made investments in one new
portfolio company and three existing portfolio companies. These
investments totaled $8.0 million, at
cost. The weighted average yield (at origination) of debt
investments made in the quarter was 12.85%.
- ICMB fully realized two portfolio companies during the
quarter, totaling $11.2 million in
proceeds. The internal rate of return on these investments was
10.70%.
- During the quarter, the Company had net advances of
$1.1 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 March 31, 2023, was
13.36%, compared to 10.73% for the quarter ended December 31, 2022.
- Net asset value decreased $0.23 per share to $6.13, compared to $6.36 as of December 31,
2022. Net assets decreased by $3.3
million, or 3.6%, during the quarter ended March 31, 2023.
Portfolio results, as of and for the three months ended
March 31, 2023:
|
Total assets
|
$239.0mm
|
|
Investment portfolio,
at fair value
|
$221.3mm
|
|
Net
assets
|
$88.2mm
|
|
Weighted average yield
on debt investments, at cost (1)
|
13.36 %
|
|
Net asset value per
share
|
$6.13
|
|
Portfolio activity in
the current quarter:
|
|
|
Number of new
investments
|
4
|
|
Total capital
invested
|
$8.0mm
|
|
Proceeds from
repayments, sales, and amortization
|
$14.9mm
|
|
Number of portfolio
companies, end of period
|
35
|
|
Net investment income
(NII)
|
$2.5mm
|
|
Net investment income
per share
|
$0.18
|
|
Net decrease in net
assets from operations
|
$1.1mm
|
|
Net decrease in net
assets from operations per share
|
$0.08
|
|
Quarterly per share
distribution paid on March 30, 2023
|
$0.15
|
|
|
(1) Represents weighted
average yield on total debt investments for the three months ended
March 31, 2023. 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 "The current high rate
environment continues to put pressure on highly levered borrowers
across the loan market in the form of elevated interest
expense. Our focus on lower leverage multiples as compared to
the broadly syndicated market provides our portfolio with
significant insulation from the liquidity pressure that many
borrowers are facing. We expect a tale of two markets; one of
conservatively structured companies with a low default rate, and
one of more aggressively leveraged companies who will see
increasing challenges in the coming quarters."
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 May 4, 2023, the Board declared
a distribution for the quarter ended June
30, 2023 of $0.13 per share
payable on July 7, 2023 to
stockholders of record as of June 16,
2023 and a supplemental distribution of $0.05 per share, payable on July 7, 2023, to stockholders of record as of
June 16, 2023.
This distribution represents a 19.73% yield on the Company's
$3.65 share price as of market close
on March 31, 2023. 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 March 31, 2023, 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 at the end of the taxable year.
Portfolio and Investment Activities
During the quarter, the Company made investments in one new
portfolio company and three existing portfolio companies. The
aggregate capital invested during the quarter totaled $8.0 million, at cost, and the debt investments
were made at a weighted average yield of 12.85%.
The Company received proceeds of $14.9
million from repayments, sales and amortization during the
quarter, primarily related to the realization of Agrofresh Inc. and
Liberty Oilfield Services, LLC.
During the quarter, the Company had net advances of $1.1 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
$3.6 million, or $0.25 per share. The total net decrease in net
assets resulting from operations for the quarter was $1.1 million, or $0.08 per share.
As of March 31, 2023, the
Company's investment portfolio consisted of investments in 35
portfolio companies, of which 90.6% were first lien investments and
9.4% were equity, warrants, and other investments. The Company's
debt portfolio consisted of 99.6% floating rate investments and
0.4% 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
March 31, 2023, filed with the
Securities and Exchange Commission on May
15, 2023.
Capital Resources
As of March
31, 2023, the Company had $14.2
million in cash, of which $11.3
million was restricted cash, and $33.1 million unused capacity under its revolving
credit facility with Capital One, N.A.
Subsequent Events
Subsequent to March 31, 2023 and through May 15, 2023, the Company invested a total of
$8.4 million, which included
investments in two new portfolio companies. As of May 15, 2023, the Company had investments in 37
portfolio companies.
|
Investcorp Credit
Management BDC, Inc. and Subsidiaries
Consolidated
Statements of Assets and Liabilities
|
|
|
|
March 31,
2023
|
|
|
|
|
|
|
(Unaudited)
|
|
|
June 30,
2022
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments, at fair value (amortized cost of
$220,410,654 and $254,172,763,
respectively)
|
|
$
|
|
211,666,909
|
|
|
$
|
|
223,037,183
|
|
|
Affiliated investments,
at fair value (amortized cost of $23,961,437 and
$23,395,242, respectively)
|
|
|
|
9,648,520
|
|
|
|
|
10,646,803
|
|
|
Total investments, at
fair value (amortized cost of $244,372,091 and $277,568,005,
respectively)
|
|
|
|
221,315,429
|
|
|
|
|
233,683,986
|
|
|
Cash
|
|
|
|
2,902,376
|
|
|
|
|
2,550,021
|
|
|
Cash,
restricted
|
|
|
|
11,256,490
|
|
|
|
|
6,605,056
|
|
|
Receivable for
investments sold
|
|
|
|
783,805
|
|
|
|
|
835,043
|
|
|
Interest
receivable
|
|
|
|
2,184,798
|
|
|
|
|
2,298,443
|
|
|
Payment-in-kind
interest receivable
|
|
|
|
48,973
|
|
|
|
|
2,137
|
|
|
Other
receivables
|
|
|
|
6,365
|
|
|
|
|
—
|
|
|
Prepaid expenses and
other assets
|
|
|
|
510,888
|
|
|
|
|
410,401
|
|
|
Total
Assets
|
|
$
|
|
239,009,124
|
|
|
$
|
|
246,385,087
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Notes
payable:
|
|
|
|
|
|
|
|
|
|
Revolving credit
facility
|
|
$
|
|
81,900,000
|
|
|
$
|
|
84,000,000
|
|
|
2026 Notes
payable
|
|
|
|
65,000,000
|
|
|
|
|
65,000,000
|
|
|
Deferred debt issuance
costs
|
|
|
|
(1,393,889)
|
|
|
|
|
(1,913,889)
|
|
|
Unamortized
discount
|
|
|
|
(213,330)
|
|
|
|
|
(266,663)
|
|
|
Notes payable,
net
|
|
|
|
145,292,781
|
|
|
|
|
146,819,448
|
|
|
Payable for investments
purchased
|
|
|
|
421,396
|
|
|
|
|
246,984
|
|
|
Dividend
payable
|
|
|
|
—
|
|
|
|
|
2,157,872
|
|
|
Income-based incentive
fees payable
|
|
|
|
33,863
|
|
|
|
|
182,095
|
|
|
Base management fees
payable
|
|
|
|
953,327
|
|
|
|
|
1,054,063
|
|
|
Interest
payable
|
|
|
|
2,958,418
|
|
|
|
|
1,574,356
|
|
|
Directors' fees
payable
|
|
|
|
13,630
|
|
|
|
|
20,780
|
|
|
Accrued expenses and
other liabilities
|
|
|
|
1,109,162
|
|
|
|
|
820,097
|
|
|
Total
Liabilities
|
|
|
|
150,782,577
|
|
|
|
|
152,875,695
|
|
|
Net
Assets
|
|
|
|
|
|
|
|
|
|
Common stock, par value
$0.001 per share (100,000,000 shares authorized 14,391,775
and 14,385,810 shares issued and outstanding,
respectively)
|
|
|
|
14,392
|
|
|
|
|
14,386
|
|
|
Additional paid-in
capital
|
|
|
|
203,611,869
|
|
|
|
|
203,590,126
|
|
|
Distributable earnings
(loss)
|
|
|
|
(115,399,714)
|
|
|
|
|
(110,095,120)
|
|
|
Total Net
Assets
|
|
|
|
88,226,547
|
|
|
|
|
93,509,392
|
|
|
Total Liabilities
and Net Assets
|
|
$
|
|
239,009,124
|
|
|
$
|
|
246,385,087
|
|
|
Net Asset Value Per
Share
|
|
$
|
|
6.13
|
|
|
$
|
|
6.50
|
|
|
|
See notes to consolidated financial
statements.
|
|
Investcorp Credit
Management BDC, Inc. and Subsidiaries
Consolidated
Statements of Operations (unaudited)
|
|
|
|
For the three months
ended
March 31,
|
|
|
For the nine months
ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
Investment
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
$
|
|
6,314,620
|
|
|
$
|
|
5,430,305
|
|
|
$
|
|
18,184,247
|
|
|
$
|
|
17,375,069
|
|
|
Affiliated
investments
|
|
|
|
—
|
|
|
|
|
(20,929)
|
|
|
|
|
(20,611)
|
|
|
|
|
100,390
|
|
|
Total interest
income
|
|
|
|
6,314,620
|
|
|
|
|
5,409,376
|
|
|
|
|
18,163,636
|
|
|
|
|
17,475,459
|
|
|
Payment in-kind
interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
|
|
575,231
|
|
|
|
|
79,679
|
|
|
|
|
1,096,040
|
|
|
|
|
117,143
|
|
|
Affiliated
investments
|
|
|
|
17,491
|
|
|
|
|
14,843
|
|
|
|
|
51,938
|
|
|
|
|
167,012
|
|
|
Total
payment-in-kind interest income
|
|
|
|
592,722
|
|
|
|
|
94,522
|
|
|
|
|
1,147,978
|
|
|
|
|
284,155
|
|
|
Dividend
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
101,755
|
|
|
|
|
—
|
|
|
Affiliated
investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
296,126
|
|
|
Total dividend
income
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
101,755
|
|
|
|
|
296,126
|
|
|
Other fee
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
|
|
98,498
|
|
|
|
|
412,516
|
|
|
|
|
670,926
|
|
|
|
|
552,744
|
|
|
Affiliated
investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,510
|
|
|
Total other fee
income
|
|
|
|
98,498
|
|
|
|
|
412,516
|
|
|
|
|
670,926
|
|
|
|
|
554,254
|
|
|
Total investment
income
|
|
|
|
7,005,840
|
|
|
|
|
5,916,414
|
|
|
|
|
20,084,295
|
|
|
|
|
18,609,994
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
2,166,739
|
|
|
|
|
1,527,148
|
|
|
|
|
6,119,083
|
|
|
|
|
5,059,231
|
|
|
Base management
fees
|
|
|
|
1,043,306
|
|
|
|
|
1,161,530
|
|
|
|
|
3,204,391
|
|
|
|
|
3,413,139
|
|
|
Income-based incentive
fees
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(147,145)
|
|
|
|
|
—
|
|
|
Provision for tax
expense
|
|
|
|
77,575
|
|
|
|
|
242,658
|
|
|
|
|
187,763
|
|
|
|
|
270,618
|
|
|
Professional
fees
|
|
|
|
271,784
|
|
|
|
|
342,205
|
|
|
|
|
815,347
|
|
|
|
|
947,964
|
|
|
Allocation of
administrative costs from Adviser
|
|
|
|
375,900
|
|
|
|
|
348,849
|
|
|
|
|
1,127,700
|
|
|
|
|
1,052,249
|
|
|
Amortization of
deferred debt issuance costs
|
|
|
|
173,333
|
|
|
|
|
173,334
|
|
|
|
|
520,000
|
|
|
|
|
447,778
|
|
|
Amortization of
original issue discount - 2026 Notes
|
|
|
|
17,777
|
|
|
|
|
17,777
|
|
|
|
|
53,332
|
|
|
|
|
53,332
|
|
|
Insurance
expense
|
|
|
|
120,093
|
|
|
|
|
132,259
|
|
|
|
|
395,734
|
|
|
|
|
374,527
|
|
|
Directors'
fees
|
|
|
|
75,625
|
|
|
|
|
75,625
|
|
|
|
|
226,875
|
|
|
|
|
226,875
|
|
|
Custodian and
administrator fees
|
|
|
|
74,397
|
|
|
|
|
73,161
|
|
|
|
|
217,913
|
|
|
|
|
221,005
|
|
|
Other
expenses
|
|
|
|
151,093
|
|
|
|
|
154,148
|
|
|
|
|
426,908
|
|
|
|
|
469,003
|
|
|
Total
expenses
|
|
|
|
4,547,622
|
|
|
|
|
4,248,694
|
|
|
|
|
13,147,901
|
|
|
|
|
12,535,721
|
|
|
Waiver of base
management fees
|
|
|
|
(89,939)
|
|
|
|
|
(128,831)
|
|
|
|
|
(296,566)
|
|
|
|
|
(352,645)
|
|
|
Waiver of income-based
incentive fees
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Net
expenses
|
|
|
|
4,457,683
|
|
|
|
|
4,119,863
|
|
|
|
|
12,851,335
|
|
|
|
|
12,183,076
|
|
|
Net investment
income
|
|
|
|
2,548,157
|
|
|
|
|
1,796,551
|
|
|
|
|
7,232,960
|
|
|
|
|
6,426,918
|
|
|
Net realized and
unrealized gain/(loss) on investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain
(loss) from investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
|
|
(26,890,095)
|
|
|
|
|
(6,607,419)
|
|
|
|
|
(26,890,095)
|
|
|
|
|
(6,194,307)
|
|
|
Affiliated
investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(8,196,669)
|
|
|
Net realized gain
(loss) from investments
|
|
|
|
(26,890,095)
|
|
|
|
|
(6,607,419)
|
|
|
|
|
(26,890,095)
|
|
|
|
|
(14,390,976)
|
|
|
Net change in
unrealized appreciation (depreciation) in value of
investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
|
|
24,505,471
|
|
|
|
|
5,595,748
|
|
|
|
|
22,391,835
|
|
|
|
|
8,064,316
|
|
|
Affiliated
investments
|
|
|
|
(1,267,677)
|
|
|
|
|
(847,961)
|
|
|
|
|
(1,564,478)
|
|
|
|
|
6,573,008
|
|
|
Net change in
unrealized appreciation (depreciation) on investments
|
|
|
|
23,237,794
|
|
|
|
|
4,747,787
|
|
|
|
|
20,827,357
|
|
|
|
|
14,637,324
|
|
|
Total realized gain
(loss) and change in unrealized appreciation
(depreciation) on investments
|
|
|
|
(3,652,301)
|
|
|
|
|
(1,859,632)
|
|
|
|
|
(6,062,738)
|
|
|
|
|
246,348
|
|
|
Net increase
(decrease) in net assets resulting from operations
|
|
$
|
|
(1,104,144)
|
|
|
$
|
|
(63,081)
|
|
|
$
|
|
1,170,222
|
|
|
$
|
|
6,673,266
|
|
|
Basic and
diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
per share
|
|
$
|
|
0.18
|
|
|
$
|
|
0.12
|
|
|
$
|
|
0.50
|
|
|
$
|
|
0.45
|
|
|
Earnings per
share
|
|
$
|
|
(0.08)
|
|
|
$
|
|
(0.00)
|
|
|
$
|
|
0.08
|
|
|
$
|
|
0.47
|
|
|
Weighted average shares
of common stock outstanding
|
|
|
|
14,389,868
|
|
|
|
|
14,384,988
|
|
|
|
|
14,388,295
|
|
|
|
|
14,277,683
|
|
|
Distributions paid
per common share
|
|
$
|
|
0.15
|
|
|
$
|
|
0.15
|
|
|
$
|
|
0.45
|
|
|
$
|
|
0.45
|
|
|
|
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 March
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
View original
content:https://www.prnewswire.com/news-releases/investcorp-credit-management-bdc-inc-announces-financial-results-for-the-quarter-ended-march-31-2023-and-quarterly-and-supplemental-distributions-301825126.html
SOURCE Investcorp Credit Management BDC