Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) (“ICMB” or the “Company”) announced its financial results today for its fiscal third quarter ended March 31, 2024.
HIGHLIGHTS
- On April 12, 2024, the Company’s Board of Directors (the “Board”) declared a distribution of $0.12 per share for the quarter ending June 30, 2024, payable in cash on June 14, 2024, to stockholders of record as of May 26, 2024 and a supplemental distribution of $0.03 per share, payable on June 14, 2024, to stockholders of record as of May 26, 2024.
- During the quarter, ICMB made investments in no new portfolio companies and four existing portfolio companies. These investments totaled $8.9 million, at cost. The weighted average yield (at origination) of debt investments made in the quarter was 12.49%.
- ICMB fully realized its investments in six portfolio companies during the quarter, totaling $21.2 million in proceeds. The internal rate of return on these investments was 17.09%.
- During the quarter, the Company had net repayments of $3.8 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, 2024, was 12.36%, compared to 11.46% for the quarter ended December 31, 2023.
- Net asset value increased $0.01 per share to $5.49, compared to $5.48 as of December 31, 2023. Net assets increased by $0.3 million, or 0.33%, during the quarter ended March 31, 2024 compared to December 31, 2023.
Portfolio results, as of and for the three months ended March 31, 2024:
|
Total assets
|
$210.0mm
|
|
Investment portfolio, at fair value
|
$192.2mm
|
|
Net assets
|
$79.1mm
|
|
Weighted average yield on debt investments, at cost (1)
|
12.36%
|
|
Net asset value per share
|
$5.49
|
|
Portfolio activity in the current quarter:
|
|
|
Number of investments in new portfolio companies during the period
|
0
|
|
Number of portfolio companies invested in, end of period
|
40
|
|
Total capital invested in existing portfolio companies (2)
|
$10.2mm
|
|
Total proceeds from repayments, sales, and amortization (3)
|
$26.7mm
|
|
Net investment income (NII)
|
$2.1mm
|
|
Net investment income per share
|
$0.14
|
|
Net increase in net assets from operations
|
$2.4mm
|
|
Net increase in net assets from operations per share
|
$0.17
|
|
Quarterly per share distribution paid on March 31, 2024
|
$0.15
|
(1) Represents weighted average yield on total debt investments for the three months ended March 31, 2024. 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.
(2) Includes gross advances to existing revolving credit commitments to portfolio companies and PIK interest
(3) Includes gross repayments on existing delayed draw and revolving credit commitments to portfolio companies
Mr. Suhail A. Shaikh said "As of yesterday, I have been appointed as Chief Executive Officer of ICMB, effective immediately, and will now serve as the sole Chief Investment Officer of the advisor. It is in honor to be named CEO at this time where the current lending environment favors alternative lenders such as business development companies, and we are well positioned to execute our business strategy in the current market. I want to thank Mike Mauer and am grateful to have him as a partner. Mike will continue to serve as Chairman of ICMB and will become Vice Chairman of the advisor's private credit business. Mike will continue to serve on the investment committee of the advisor to provide his guidance and experience for the next chapter of our business. I look forward to working with Mike and the rest of the team to create shareholder value."
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 April 12, 2024, the Board declared a distribution for the quarter ended June 30, 2024 of $0.12 per share payable on June 14, 2024 to stockholders of record as of May 26, 2024 and a supplemental distribution of $0.03 per share, payable on June 14, 2024, to stockholders of record as of May 26, 2024.
This distribution represents a 19.29% yield on the Company’s $3.11 share price as of market close on March 28, 2024. 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, 2024, 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 no new portfolio companies and four existing portfolio companies. The aggregate capital invested during the quarter totaled $8.9 million, at cost, and the debt investments were made at a weighted average yield of 12.49%.
The Company received proceeds of $26.7 million from repayments, sales and amortization during the quarter, primarily related to the realization of Evergreen North America Acquisitions, LLC, AMCP Clean Acquisition Company LLC, Amerequip, LLC, AHF Parent Holding, Inc., LSF9 Atlantis Holdings LLC (Victra) and 1888 Industrial Services, LLC.
During the quarter, the Company had net repayments of $3.8 million on its existing delayed draw and revolving credit commitment to portfolio companies.
The Company’s net realized, and unrealized gains and losses accounted for an increase in the Company’s net investments of approximately $0.3 million, or $0.02 per share. The total net increase in net assets resulting from operations for the quarter was $2.4 million, or $0.17 per share.
As of March 31, 2024, the Company’s investment portfolio consisted of investments in 40 portfolio companies, of which 83.82% were first lien investments and 16.18% were equity, warrants, and other investments. The Company’s debt portfolio consisted of 99.6% floating rate investments and 0.4% fixed rate investments.
Capital Resources
As of March 31, 2024, the Company had $12.9 million in cash, of which $10.2 million was restricted cash, and $42.5 million of unused and available capacity under its revolving credit facility with Capital One, N.A.
Subsequent Events
From April 1, 2024 through May 14, 2024, the Company invested $10.5 million in two new portfolio companies and one existing portfolio company and received approximately $13.8 million from the repayment of two positions.
|
Investcorp Credit Management BDC, Inc. and Subsidiaries
Consolidated Statements of Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2024
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
June 30, 2023
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments, at fair value (amortized cost of $195,540,865 and $219,319,251, respectively)
|
|
$
|
|
186,948,019
|
|
|
$
|
|
210,150,018
|
|
|
Affiliated investments, at fair value (amortized cost of $15,129,208 and $23,979,565, respectively)
|
|
|
|
5,255,262
|
|
|
|
|
9,961,311
|
|
|
Total investments, at fair value (amortized cost of $210,670,073 and $243,298,816, respectively)
|
|
|
|
192,203,281
|
|
|
|
|
220,111,329
|
|
|
Cash
|
|
|
|
2,728,347
|
|
|
|
|
1,093,758
|
|
|
Cash, restricted
|
|
|
|
10,161,162
|
|
|
|
|
8,057,458
|
|
|
Receivable for investments sold
|
|
|
|
1,972,100
|
|
|
|
|
—
|
|
|
Principal receivable
|
|
|
|
47,692
|
|
|
|
|
93,581
|
|
|
Interest receivable
|
|
|
|
1,304,722
|
|
|
|
|
2,041,877
|
|
|
Payment-in-kind interest receivable
|
|
|
|
59,166
|
|
|
|
|
46,088
|
|
|
Due from affiliate
|
|
|
|
175,916
|
|
|
|
|
—
|
|
|
Long-term receivable
|
|
|
|
618,772
|
|
|
|
|
—
|
|
|
Escrow receivable
|
|
|
|
95,190
|
|
|
|
|
—
|
|
|
Other receivables
|
|
|
|
—
|
|
|
|
|
1,050
|
|
|
Prepaid expenses and other assets
|
|
|
|
604,201
|
|
|
|
|
361,719
|
|
|
Total Assets
|
|
$
|
|
209,970,549
|
|
|
$
|
|
231,806,860
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Notes payable:
|
|
|
|
|
|
|
|
|
|
Revolving credit facility
|
|
$
|
|
57,500,000
|
|
|
$
|
|
71,900,000
|
|
|
2026 Notes payable
|
|
|
|
65,000,000
|
|
|
|
|
65,000,000
|
|
|
Deferred debt issuance costs
|
|
|
|
(1,807,459
|
)
|
|
|
|
(1,220,556
|
)
|
|
Unamortized discount
|
|
|
|
(142,220
|
)
|
|
|
|
(195,553
|
)
|
|
Notes payable, net
|
|
|
|
120,550,321
|
|
|
|
|
135,483,891
|
|
|
Payable for investments purchased
|
|
|
|
3,487,533
|
|
|
|
|
1,795,297
|
|
|
Dividend payable
|
|
|
|
2,159,568
|
|
|
|
|
2,590,520
|
|
|
Income-based incentive fees payable
|
|
|
|
128,876
|
|
|
|
|
576,023
|
|
|
Base management fees payable
|
|
|
|
854,328
|
|
|
|
|
906,218
|
|
|
Interest payable
|
|
|
|
2,972,954
|
|
|
|
|
2,293,766
|
|
|
Directors' fees payable
|
|
|
|
—
|
|
|
|
|
15,755
|
|
|
Accrued expenses and other liabilities
|
|
|
|
716,004
|
|
|
|
|
445,082
|
|
|
Total Liabilities
|
|
|
|
130,869,584
|
|
|
|
|
144,106,552
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.001 per share (100,000,000 shares authorized 14,397,121 and 14,391,775 shares issued and outstanding, respectively)
|
|
|
|
14,397
|
|
|
|
|
14,392
|
|
|
Additional paid-in capital
|
|
|
|
203,346,421
|
|
|
|
|
203,327,714
|
|
|
Distributable earnings (loss)
|
|
|
|
(124,259,853
|
)
|
|
|
|
(115,641,798
|
)
|
|
Total Net Assets
|
|
|
|
79,100,965
|
|
|
|
|
87,700,308
|
|
|
Total Liabilities and Net Assets
|
|
$
|
|
209,970,549
|
|
|
$
|
|
231,806,860
|
|
|
Net Asset Value Per Share
|
|
$
|
|
5.49
|
|
|
$
|
|
6.09
|
|
|
|
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,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Investment Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments
|
|
$
|
|
5,561,333
|
|
|
$
|
|
6,314,620
|
|
|
$
|
|
16,180,220
|
|
|
$
|
|
18,184,247
|
|
|
Affiliated investments
|
|
|
|
28,830
|
|
|
|
|
—
|
|
|
|
|
29,370
|
|
|
|
|
(20,611
|
)
|
|
Total interest income
|
|
|
|
5,590,163
|
|
|
|
|
6,314,620
|
|
|
|
|
16,209,590
|
|
|
|
|
18,163,636
|
|
|
Payment in-kind interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments
|
|
|
|
613,765
|
|
|
|
|
401,978
|
|
|
|
|
1,281,265
|
|
|
|
|
584,645
|
|
|
Affiliated investments
|
|
|
|
19,553
|
|
|
|
|
17,491
|
|
|
|
|
57,633
|
|
|
|
|
51,938
|
|
|
Total payment-in-kind interest income
|
|
|
|
633,318
|
|
|
|
|
419,469
|
|
|
|
|
1,338,898
|
|
|
|
|
636,583
|
|
|
Dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments
|
|
|
|
54,138
|
|
|
|
|
—
|
|
|
|
|
54,138
|
|
|
|
|
101,755
|
|
|
Affiliated investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Total dividend income
|
|
|
|
54,138
|
|
|
|
|
—
|
|
|
|
|
54,138
|
|
|
|
|
101,755
|
|
|
Payment in-kind dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments
|
|
|
|
198,123
|
|
|
|
|
173,253
|
|
|
|
|
580,556
|
|
|
|
|
511,395
|
|
|
Affiliated investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Total payment-in-kind dividend income
|
|
|
|
198,123
|
|
|
|
|
173,253
|
|
|
|
|
580,556
|
|
|
|
|
511,395
|
|
|
Other fee income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments
|
|
|
|
142,347
|
|
|
|
|
98,498
|
|
|
|
|
575,801
|
|
|
|
|
670,926
|
|
|
Affiliated investments
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Total other fee income
|
|
|
|
142,347
|
|
|
|
|
98,498
|
|
|
|
|
575,801
|
|
|
|
|
670,926
|
|
|
Total investment income
|
|
|
|
6,618,089
|
|
|
|
|
7,005,840
|
|
|
|
|
18,758,983
|
|
|
|
|
20,084,295
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
2,174,195
|
|
|
|
|
2,166,739
|
|
|
|
|
6,649,314
|
|
|
|
|
6,119,083
|
|
|
Base management fees
|
|
|
|
951,799
|
|
|
|
|
1,043,306
|
|
|
|
|
2,910,978
|
|
|
|
|
3,204,391
|
|
|
Income-based incentive fees
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(72,942
|
)
|
|
|
|
(147,145
|
)
|
|
Provision for tax expense
|
|
|
|
111,646
|
|
|
|
|
77,575
|
|
|
|
|
321,890
|
|
|
|
|
187,763
|
|
|
Professional fees
|
|
|
|
354,934
|
|
|
|
|
271,784
|
|
|
|
|
981,322
|
|
|
|
|
815,347
|
|
|
Allocation of administrative costs from Adviser
|
|
|
|
225,856
|
|
|
|
|
375,900
|
|
|
|
|
1,118,276
|
|
|
|
|
1,127,700
|
|
|
Amortization of deferred debt issuance costs
|
|
|
|
152,591
|
|
|
|
|
173,333
|
|
|
|
|
423,885
|
|
|
|
|
520,000
|
|
|
Amortization of original issue discount - 2026 Notes
|
|
|
|
17,777
|
|
|
|
|
17,777
|
|
|
|
|
53,332
|
|
|
|
|
53,332
|
|
|
Insurance expense
|
|
|
|
125,766
|
|
|
|
|
120,093
|
|
|
|
|
351,734
|
|
|
|
|
395,734
|
|
|
Directors' fees
|
|
|
|
75,157
|
|
|
|
|
75,625
|
|
|
|
|
221,407
|
|
|
|
|
226,875
|
|
|
Custodian and administrator fees
|
|
|
|
68,031
|
|
|
|
|
74,397
|
|
|
|
|
214,892
|
|
|
|
|
217,913
|
|
|
Other expenses
|
|
|
|
379,406
|
|
|
|
|
151,093
|
|
|
|
|
595,233
|
|
|
|
|
426,908
|
|
|
Total expenses
|
|
|
|
4,637,158
|
|
|
|
|
4,547,622
|
|
|
|
|
13,769,321
|
|
|
|
|
13,147,901
|
|
|
Waiver of base management fees
|
|
|
|
(97,431
|
)
|
|
|
|
(89,939
|
)
|
|
|
|
(292,326
|
)
|
|
|
|
(296,566
|
)
|
|
Waiver of income-based incentive fees
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Net expenses
|
|
|
|
4,539,727
|
|
|
|
|
4,457,683
|
|
|
|
|
13,476,995
|
|
|
|
|
12,851,335
|
|
|
Net investment income
|
|
|
|
2,078,362
|
|
|
|
|
2,548,157
|
|
|
|
|
5,281,988
|
|
|
|
|
7,232,960
|
|
|
Net realized and unrealized gain/(loss) on investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) from investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments
|
|
|
|
(31,984
|
)
|
|
|
|
(26,890,095
|
)
|
|
|
|
(5,903,023
|
)
|
|
|
|
(26,890,095
|
)
|
|
Affiliated investments
|
|
|
|
(6,239,984
|
)
|
|
|
|
—
|
|
|
|
|
(6,239,984
|
)
|
|
|
|
—
|
|
|
Net realized gain (loss) from investments
|
|
|
|
(6,271,968
|
)
|
|
|
|
(26,890,095
|
)
|
|
|
|
(12,143,007
|
)
|
|
|
|
(26,890,095
|
)
|
|
Net change in unrealized appreciation (depreciation) in value of investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments
|
|
|
|
1,089,608
|
|
|
|
|
24,505,471
|
|
|
|
|
576,387
|
|
|
|
|
22,391,835
|
|
|
Affiliated investments
|
|
|
|
5,515,738
|
|
|
|
|
(1,267,677
|
)
|
|
|
|
4,144,308
|
|
|
|
|
(1,564,478
|
)
|
|
Net change in unrealized appreciation (depreciation) on investments
|
|
|
|
6,605,346
|
|
|
|
|
23,237,794
|
|
|
|
|
4,720,695
|
|
|
|
|
20,827,357
|
|
|
Total realized gain (loss) and change in unrealized appreciation (depreciation) on investments
|
|
|
|
333,378
|
|
|
|
|
(3,652,301
|
)
|
|
|
|
(7,422,312
|
)
|
|
|
|
(6,062,738
|
)
|
|
Net increase (decrease) in net assets resulting from operations
|
|
$
|
|
2,411,740
|
|
|
$
|
|
(1,104,144
|
)
|
|
$
|
|
(2,140,324
|
)
|
|
$
|
|
1,170,222
|
|
|
Basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income per share
|
|
$
|
|
0.14
|
|
|
$
|
|
0.18
|
|
|
$
|
|
0.37
|
|
|
$
|
|
0.50
|
|
|
Earnings per share
|
|
$
|
|
0.17
|
|
|
$
|
|
(0.08
|
)
|
|
$
|
|
(0.15
|
)
|
|
$
|
|
0.08
|
|
|
Weighted average shares of common stock outstanding
|
|
|
|
14,396,951
|
|
|
|
|
14,389,868
|
|
|
|
|
14,394,574
|
|
|
|
|
14,388,295
|
|
|
Distributions paid per common share
|
|
$
|
|
0.15
|
|
|
$
|
|
0.15
|
|
|
$
|
|
0.45
|
|
|
$
|
|
0.45
|
|
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 $50 million and earnings before interest, taxes, depreciation, and amortization of at least $15 million. 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, 2023, 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, 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240514603623/en/