Investcorp Credit Management BDC, Inc. Announces Financial Results for the Quarter Ended March 31, 2021 and Quarterly and Supplemental Distributions

News provided by

Investcorp Credit Management BDC, Inc.

May 10, 2021, 16:56 ET

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
March 31,

For the nine months ended
March 31,











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: [email protected]
Phone: 212-257-5182

SOURCE Investcorp Credit Management BDC, Inc.

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