Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2024
HOUSTON, May 9, 2024 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus" or the "Company") today announced financial results for its first fiscal quarter ended March 31, 2024.
Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended March 31, 2024, in which net asset value grew by $0.15 per share and U.S. GAAP net investment income of $0.42 per share and core net investment income of $0.44 per share covered the regular dividend declared of $0.40 per share. Our loan portfolio is yielding 11.9%, as of March 31, 2024. We have completed over eleven years of operations, during which our investors have received a total of $252 million in distributions, equivalent to $15.35 per share."
FINANCIAL HIGHLIGHTS | |||||
($ in millions, except data relating to per share amounts and shares outstanding) | |||||
Three Months Ended | |||||
March 31, 2024 | March 31, 2023 | ||||
Amount | Per Share | Amount | Per Share | ||
Net investment income | $10.24 | $0.42 | $9.07 | $0.46 | |
Core net investment income(1) | 10.61 | 0.44 | 8.87 | 0.45 | |
Net realized (loss) gain on investments | (20.38) | (0.85) | 0.03 | — | |
Net realized loss on foreign currency translation | (0.03) | — | (0.04) | — | |
Total realized income(2) | ($10.17) | ($0.43) | $9.06 | $0.46 | |
Distributions | (9.65) | (0.40) | (7.95) | (0.40) | |
Net unrealized change in appreciation (depreciation) on investments | 23.52 | 0.98 | (4.25) | (0.22) | |
Provision for taxes on unrealized appreciation on investments in taxable subsidiaries | (0.20) | (0.01) | (0.07) | — | |
Net increase in net assets resulting from operations | $13.15 | $0.54 | $4.74 | $0.24 | |
Weighted average shares outstanding | 24,125,642 | 19,779,988 | |||
(1) | Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. generally accepted accounting principles ("U.S. GAAP") measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements. |
(2) | Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and loss on debt extinguishment; all U.S. GAAP measures. |
PORTFOLIO ACTIVITY | ||||
($ in millions, except data relating to per share amounts and number of portfolio companies) | ||||
As of | As of | |||
March 31, 2024 | December 31, 2023 | |||
Investments at fair value | $875.9 | $874.5 | ||
Total assets | $935.2 | $908.1 | ||
Net assets | $323.4 | $319.9 | ||
Shares outstanding | 24,125,642 | 24,125,642 | ||
Net asset value per share | $13.41 | $13.26 | ||
Three Months Ended | ||||
March 31, 2024 | March 31, 2023 | |||
New investments | $28.5 | $41.2 | ||
Repayments of investments | (31.2) | (5.9) | ||
Net activity | ($2.7) | $35.3 | ||
As of | As of | |||
March 31, 2024 | December 31, 2023 | |||
Number of portfolio company investments | 94 | 93 | ||
Number of debt investments | 81 | 81 | ||
Weighted average yield of debt and other income producing investments (3) | ||||
Cash | 11.0 % | 11.0 % | ||
Payment-in-kind ("PIK") | 0.5 % | 0.5 % | ||
Fee amortization | 0.4 % | 0.4 % | ||
Total | 11.9 % | 11.9 % | ||
Weighted average yield on total investments (4) | ||||
Cash | 10.3 % | 10.3 % | ||
Payment-in-kind ("PIK") | 0.5 % | 0.5 % | ||
Fee amortization | 0.3 % | 0.3 % | ||
Total | 11.1 % | 11.1 % | ||
(3) | The dollar-weighted average annualized effective yield is computed using the effective interest rate for our debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in the Company's common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors. |
(4) | The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing loans and equity. |
Results of Operations
Investment income for the three months ended March 31, 2024 and 2023 totaled $26.0 million and $24.1 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended March 31, 2024 and 2023, totaled $16.0 million and $15.0 million, respectively. The increase was driven primarily by increased incentive fees. For the same respective periods, base management fees totaled $3.9 million and $3.7 million, income incentive fees totaled $2.5 million and $2.1 million, capital gains incentive fee reversals totaled ($0.0) million and ($0.6) million, fees and expenses related to our borrowings totaled $7.8 million and $7.9 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.5 million for both periods, income tax totaled $0.4 million for both periods and other expenses totaled $0.9 million and $1.0 million. For the three months ended March 31, 2024, the Company waived income incentive fees totaling $0.2 million for net operating expenses of $15.8 million. No such income incentive fees were waived for the three months ended March 31, 2023.
Net investment income was $10.2 million and $9.1 million, or $0.42 and $0.46 per common share based on weighted average common shares outstanding of 24,125,642 and 19,779,988 for the three months ended March 31, 2024 and 2023, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes the capital gains incentive fee (reversal) and income tax expense accruals, for the three months ended March 31, 2024 and 2023 was $10.6 million and $8.9 million, or $0.44 and $0.45 per share, respectively.
For the three months ended March 31, 2024 and 2023, the Company's investment portfolio had a net change in unrealized appreciation (depreciation) of $23.5 million and ($4.2) million, respectively, and the Company had net realized (losses) gains of ($20.4) million and less than $0.1 million, respectively. The full realizations for the three months ended March 31, 2024 had previously been reflected as unrealized depreciation which were reversed during the three months then ended and included in the $23.5 million of unrealized appreciation as of March 31, 2024.
Net increase in net assets resulting from operations totaled $13.1 million and $4.7 million, or $0.54 and $0.24 per common share, based on weighted average common shares outstanding of 24,125,642 and 19,779,988 for the three months ended March 31, 2024 and 2023, respectively.
Liquidity and Capital Resources
As of March 31, 2024, the Company's amended senior secured revolving credit agreement with certain bank lenders and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent (as amended from time to time, the "Credit Facility") provided for borrowings in an aggregate amount of up to $260.0 million on a committed basis. As of March 31, 2024 and December 31, 2023, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $350.0 million.
As of March 31, 2024 and December 31, 2023, the Company had $184.7 million and $160.1 million in outstanding borrowings under the Credit Facility, respectively.
Distributions
During the three months ended March 31, 2024 and 2023, the Company declared aggregate distributions of $0.40 per share for both periods ($9.6 million and $8.0 million in the aggregate, respectively). Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. None of these dividends are expected to include a return of capital.
Recent Portfolio Activity
The Company invested in the following portfolio companies during the three months ended March 31, 2024:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
Add-On Investment | January 5, 2024 | Whisps Holdings LP* | Manufacturer of cheese-based snacks | $ | 75,192 | Equity | |||||
Add-On Investment | January 8, 2024 | EH Real Estate Services, LLC* | Offers residential property brokerage, title & settlement, and | $ | 475,233 | Senior Secured – First Lien | |||||
Add-On Investment | January 9, 2024 | Morgan Electrical Group Intermediate Holdings, Inc.* | Provider of commercial electrical services | $ | 23,531 | Equity | |||||
Add-On Investment | January 12, 2024 | Impact Home Services LLC* | Residential garage door, electrical, and plumbing services provider | $ | 50,914 | Equity | |||||
Add-On Investment | January 31, 2024 | Impact Home Services LLC* | Residential garage door, electrical, and plumbing services provider | $ | 22,331 | Equity | |||||
Add-On Investment | February 7, 2024 | Unicat Catalyst Holdings, LLC* | Manufacturer and distributor of catalysts and other industrial products | $ | 7,032 | Equity | |||||
Add-On Investment | March 1, 2024 | Monitorus Holding, LLC* | Provider of media monitoring and evaluation services | $ | 13,290 | Unsecured Convertible Bond | |||||
New Investment | March 11, 2024 | Exec Connect Intermediate LLC | Facilitator of executive-level in-person events and remote peer-to-peer industry insights | $ | 4,311,584 | Senior Secured – First Lien | |||||
$ | 627,139 | Delayed Draw Term Loan Commitment | |||||||||
$ | 391,962 | Revolver Commitment | |||||||||
New Investment | March 11, 2024 | Titan Meter Bidco Corp. | Provider of liquid metering products and integrated solutions to the energy infrastructure sector | $ | 10,029,219 | Senior Secured – First Lien | |||||
$ | 1,055,707 | Revolver Commitment | |||||||||
$ | 515,578 | Equity | |||||||||
Add-On Investment | March 20, 2024 | Advanced Barrier Extrusions, LLC* | Manufacturer of high barrier forming web films | $ | 32,489 | Equity | |||||
New Investment | March 26, 2024 | Med Learning Group, LLC | Provider of continuing medical education services | $ | 8,977,710 | Senior Secured – First Lien | |||||
$ | 2,445,188 | Delayed Draw Term Loan Commitment | |||||||||
Add-On Investment | March 28, 2024 | Rogers Mechanical Contractors, LLC* | HVAC and plumbing designer, installer, and service provider for | $ | 45,212 | Senior Secured – First Lien | |||||
______________________________ | |||||||||||
*Existing portfolio company | |||||||||||
The Company realized investments in the following portfolio companies during the three months ended March 31, 2024:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Instrument Type | ||||||
Full Repayment | January 8, 2024 | Peltram Plumbing Holdings, LLC* | Provider of plumbing solutions | $ | 16,160,003 | Senior Secured – First Lien | |||||
Full Realization | March 4, 2024 | NuMet Machining Techniques, LLC* | Supplier of complex, mission critical | $ | (12,675,000) | Senior Secured – Second Lien | |||||
Bromford Industries Limited* | $ | (7,800,000) | Senior Secured – Second Lien | ||||||||
Full Repayment | March 5, 2024 | Dresser Utility Solutions, LLC* | Manufacturer of rotary meters, pipeline | $ | 10,000,000 | Senior Secured – Second Lien | |||||
______________________________ | |||||||||||
*Existing portfolio company | |||||||||||
Events Subsequent to March 31, 2024
The Company's management has evaluated subsequent events through May 9, 2024. There have been no subsequent events that require recognition or disclosure except for the following described below.
Investment Portfolio
The Company invested in the following portfolio companies subsequent to March 31, 2024:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
New Investment | April 1, 2024 | FairWave Holdings, LLC | Specialty coffee platform | $ | 7,615,265 | Senior Secured – First Lien | |||||
$ | 2,665,343 | Delayed Draw Term Loan Commitment | |||||||||
$ | 1,142,290 | Revolver Commitment | |||||||||
$ | 285,572 | Equity | |||||||||
New Investment | April 11, 2024 | WER Holdings, LLC | Regional provider of commercial landscaping services | $ | 2,704,164 | Senior Secured – First Lien | |||||
$ | 1,338,695 | Delayed Draw Term Loan Commitment | |||||||||
$ | 401,609 | Revolver Commitment | |||||||||
$ | 180,300 | Equity | |||||||||
Add-On Investment | April 16, 2024 | Impact Home Services LLC* | Residential garage door, electrical, and plumbing | $ | 8,932 | Equity | |||||
$ | 90,773 | Senior Secured – First Lien | |||||||||
Add-On Investment | April 22, 2024 | Exacta Land Surveyors, LLC* | Provider of land survey and field management services | $ | 2,164 | Equity | |||||
______________________________ | |||||||||||
*Existing portfolio company | |||||||||||
The Company realized investments in the following portfolio company subsequent to March 31, 2024:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Gain | Instrument Type | ||||||||
Full Repayment | May 1, 2024 | Nutritional Medicinals, LLC* | Manufacturer and distributor of | $ | 11,421,291 | $ | - | Senior Secured – First Lien | ||||||
$ | 2,950,929 | $ | 1,978,126 | Equity | ||||||||||
______________________________ | ||||||||||||||
*Existing portfolio company | ||||||||||||||
Credit Facility
The outstanding balance under the Credit Facility as of May 9, 2024 was $172.5 million.
Distributions Declared
On April 3, 2024, our Board of Directors declared a regular monthly distribution for each of April, May, and June 2024, as follows:
Ex-Dividend | Record | Payment | Amount per | ||||||
Declared | Date | Date | Date | Share | |||||
4/3/2024 | 4/29/2024 | 4/30/2024 | 5/15/2024 | $ | 0.1333 | ||||
4/3/2024 | 5/31/2024 | 5/31/2024 | 6/14/2024 | $ | 0.1333 | ||||
4/3/2024 | 6/28/2024 | 6/28/2024 | 7/15/2024 | $ | 0.1333 | ||||
Conference Call Information
Stellus Capital Investment Corporation will host a conference call to discuss these results on Friday, May 10, 2024 at 11:00 AM, Central Time. The conference call will be led by Robert T. Ladd, Chief Executive Officer, and W. Todd Huskinson, Chief Financial Officer, Chief Compliance Officer, Treasurer, and Secretary.
For those wishing to participate by telephone, please dial (888) 506-0062. Use passcode 292372. Starting approximately two hours after the conclusion of the call, a replay will be available through Friday, May 24, 2024 by dialing (877) 481-4010 and entering passcode 50586. The replay will also be available on the Company's website.
For those wishing to participate via Live Webcast, connect via the Public (SCIC) section of our website at www.stelluscapital.com, under the Events tab. A replay of the conference will be available on our website for approximately 90 days.
About Stellus Capital Investment Corporation
The Company is an externally-managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) through first lien (including unitranche) loans, second lien loans and unsecured debt financing, with corresponding equity co-investments. The Company's investment activities are managed by its investment adviser, Stellus Capital Management. To learn more about Stellus Capital Investment Corporation, visit www.stelluscapital.com under the "Public (SCIC)" tab.
Forward-Looking Statements
Statements included herein may contain "forward-looking statements" which relate to future performance or financial condition. 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 including the final prospectus that will be filed with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Contacts
Stellus Capital Investment Corporation
W. Todd Huskinson, Chief Financial Officer
(713) 292-5414
[email protected]
STELLUS CAPITAL INVESTMENT CORPORATION | |||||||
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | |||||||
March 31, 2024 | |||||||
(unaudited) | December 31, 2023 | ||||||
ASSETS | |||||||
Controlled investments at fair value (amortized cost of $17,934,808 and $17,285,138, | $ | 7,362,234 | $ | 6,175,994 | |||
Non-controlled, non-affiliated investments, at fair value (amortized cost of | 868,521,912 | 868,284,689 | |||||
Cash and cash equivalents | 48,761,721 | 26,125,741 | |||||
Receivable for sales and repayments of investments | 776,417 | 371,877 | |||||
Interest receivable | 6,484,400 | 4,882,338 | |||||
Income tax receivable | 2,673,730 | 1,588,708 | |||||
Other receivables | 42,995 | 42,995 | |||||
Deferred offering costs | 12,521 | 7,312 | |||||
Prepaid expenses | 585,418 | 606,674 | |||||
Total Assets | $ | 935,221,348 | $ | 908,086,328 | |||
LIABILITIES | |||||||
Notes Payable | $ | 99,107,786 | $ | 98,996,412 | |||
Credit Facility payable | 181,343,929 | 156,564,776 | |||||
SBA-guaranteed debentures | 320,587,412 | 320,273,358 | |||||
Dividends payable | 3,215,948 | — | |||||
Management fees payable | 1,852,233 | 2,918,536 | |||||
Income incentive fees payable | 2,745,073 | 2,885,180 | |||||
Interest payable | 1,493,044 | 5,241,164 | |||||
Unearned revenue | 412,314 | 397,725 | |||||
Administrative services payable | 425,048 | 402,151 | |||||
Deferred tax liability | 381,500 | 188,893 | |||||
Other accrued expenses and liabilities | 216,657 | 278,345 | |||||
Total Liabilities | $ | 611,780,944 | $ | 588,146,540 | |||
Commitments and contingencies (Note 7) | |||||||
Net Assets | $ | 323,440,404 | $ | 319,939,788 | |||
NET ASSETS | |||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized; 24,125,642 | $ | 24,125 | $ | 24,125 | |||
Paid-in capital | 335,918,984 | 335,918,984 | |||||
Total distributable loss | (12,502,705) | (16,003,321) | |||||
Net Assets | $ | 323,440,404 | $ | 319,939,788 | |||
Total Liabilities and Net Assets | $ | 935,221,348 | $ | 908,086,328 | |||
Net Asset Value Per Share | $ | 13.41 | $ | 13.26 | |||
STELLUS CAPITAL INVESTMENT CORPORATION | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||
For the three months ended | |||||||
March 31, 2024 | March 31, 2023 | ||||||
INVESTMENT INCOME | |||||||
From controlled investments: | |||||||
Interest income | $ | 81,636 | $ | — | |||
From non-controlled, non-affiliated investments | |||||||
Interest income | 24,956,851 | 23,408,604 | |||||
Other income | 958,262 | 666,743 | |||||
Total Investment Income | $ | 25,996,749 | $ | 24,075,347 | |||
OPERATING EXPENSES | |||||||
Management fees | $ | 3,852,233 | $ | 3,735,102 | |||
Valuation fees | 156,507 | 147,073 | |||||
Administrative services expenses | 490,901 | 461,964 | |||||
Income incentive fees | 2,509,110 | 2,124,835 | |||||
Capital gains incentive fee | — | (569,528) | |||||
Professional fees | 339,627 | 430,848 | |||||
Directors' fees | 108,250 | 117,250 | |||||
Insurance expense | 124,989 | 120,546 | |||||
Interest expense and other fees | 7,767,573 | 7,886,424 | |||||
Income tax expense | 370,719 | 374,763 | |||||
Other general and administrative expenses | 245,275 | 178,450 | |||||
Total Operating Expenses | $ | 15,965,184 | $ | 15,007,727 | |||
Income incentive fee waiver | (204,351) | — | |||||
Total Operating Expenses, net of fee waivers | $ | 15,760,833 | $ | 15,007,727 | |||
Net Investment Income | $ | 10,235,916 | $ | 9,067,620 | |||
Net realized (loss) gain on non-controlled, non-affiliated investments | $ | (20,384,731) | $ | 34,967 | |||
Net realized loss on foreign currency translation | (25,106) | (39,912) | |||||
Net change in unrealized appreciation on controlled investments | 536,570 | — | |||||
Net change in unrealized appreciation (depreciation) on non-controlled, non-affiliated investments | 22,982,020 | (4,249,642) | |||||
Net change in unrealized (depreciation) appreciation on foreign currency translations | (3,602) | 1,874 | |||||
Provision for taxes on net unrealized appreciation on investments | (192,607) | (78,760) | |||||
Net Increase in Net Assets Resulting from Operations | $ | 13,148,460 | $ | 4,736,147 | |||
Net Investment Income Per Share—basic and diluted | $ | 0.42 | $ | 0.46 | |||
Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted | $ | 0.54 | $ | 0.24 | |||
Weighted Average Shares of Common Stock Outstanding—basic and diluted | 24,125,642 | 19,779,988 | |||||
Distributions Per Share—basic and diluted | $ | 0.40 | $ | 0.40 | |||
STELLUS CAPITAL INVESTMENT CORPORATION | ||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited) | ||||||||||||||
Common Stock | Total | |||||||||||||
Number | Par | Paid-in | distributable | |||||||||||
of shares | value | capital | earnings (loss) | Net Assets | ||||||||||
Balances at December 31, 2022 | 19,666,769 | $ | 19,667 | $ | 275,114,720 | $ | 642,226 | $ | 275,776,613 | |||||
Net investment income | — | — | — | 9,067,620 | 9,067,620 | |||||||||
Net realized gain on investments | — | — | — | 34,967 | 34,967 | |||||||||
Net realized loss on foreign currency translations | — | — | — | (39,912) | (39,912) | |||||||||
Net change in unrealized depreciation on investments | — | — | — | (4,249,642) | (4,249,642) | |||||||||
Net change in unrealized appreciation on foreign currency translations | — | — | — | 1,874 | 1,874 | |||||||||
Provision for taxes on unrealized appreciation on investments | — | — | — | (78,760) | (78,760) | |||||||||
Distributions from net investment income | — | — | — | (7,951,284) | (7,951,284) | |||||||||
Issuance of common stock, net of offering costs(1) | 581,614 | 581 | 8,289,988 | — | 8,290,569 | |||||||||
Balances at March 31, 2023 | 20,248,383 | $ | 20,248 | $ | 283,404,708 | $ | (2,572,911) | $ | 280,852,045 | |||||
Balances at December 31, 2023 | 24,125,642 | $ | 24,125 | $ | 335,918,984 | $ | (16,003,321) | $ | 319,939,788 | |||||
Net investment income | — | — | — | 10,235,916 | 10,235,916 | |||||||||
Net realized loss on investments | — | — | — | (20,384,731) | (20,384,731) | |||||||||
Net realized loss on foreign currency translations | — | — | — | (25,106) | (25,106) | |||||||||
Net change in unrealized appreciation on investments | — | — | — | 23,518,590 | 23,518,590 | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | (3,602) | (3,602) | |||||||||
Provision for taxes on unrealized appreciation on investments | — | — | — | (192,607) | (192,607) | |||||||||
Distributions from net investment income | — | — | — | (9,647,844) | (9,647,844) | |||||||||
Balances at March 31, 2024 | 24,125,642 | $ | 24,125 | $ | 335,918,984 | $ | (12,502,705) | $ | 323,440,404 | |||||
______________________________ | |
(1) | See Note 4 to the Consolidated Financial Statements on Form 10-Q filed with the Securities and Exchange Commission on May 9, 2024 for more information on offering costs. |
STELLUS CAPITAL INVESTMENT CORPORATION | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||
For three months ended | ||||||
March 31, 2024 | March 31, 2023 | |||||
Cash flows from operating activities | ||||||
Net increase in net assets resulting from operations | $ | 13,148,460 | $ | 4,736,147 | ||
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: | ||||||
Purchases of investments | (28,516,430) | (41,237,273) | ||||
Proceeds from sales and repayments of investments | 31,169,595 | 5,890,813 | ||||
Net change in unrealized (appreciation) depreciation on investments | (23,518,590) | 4,249,642 | ||||
Net change in unrealized depreciation on foreign currency translations | 3,602 | 10,126 | ||||
Increase in investments due to PIK | (750,054) | (769,954) | ||||
Amortization of premium and accretion of discount, net | (702,543) | (665,998) | ||||
Deferred tax provision | 192,607 | 78,760 | ||||
Amortization of loan structure fees | 264,707 | 143,822 | ||||
Amortization of deferred financing costs | 111,374 | 110,150 | ||||
Amortization of loan fees on SBA-guaranteed debentures | 314,055 | 317,508 | ||||
Net realized loss (gain) on investments | 20,384,731 | (34,967) | ||||
Changes in other assets and liabilities | ||||||
Increase in interest receivable | (1,602,062) | (187,420) | ||||
Increase in income tax receivable | (1,085,022) | — | ||||
Decrease in prepaid expenses | 21,256 | 148,414 | ||||
Decrease in management fees payable | (1,066,303) | (2,592,566) | ||||
(Decrease) increase in income incentive fees payable | (140,107) | 2,124,835 | ||||
Decrease in capital gains incentive fees payable | — | (569,528) | ||||
Increase in administrative services payable | 22,897 | 39,951 | ||||
Decrease in interest payable | (3,748,120) | (3,437,073) | ||||
Decrease in related party payable | — | (646,393) | ||||
Increase (decrease) in unearned revenue | 14,589 | (47,573) | ||||
Increase in income tax payable | — | 374,460 | ||||
Decrease in other accrued expenses and liabilities | (61,688) | (78,907) | ||||
Net Cash Provided (Used) in Operating Activities | $ | 4,456,954 | $ | (32,043,024) | ||
Cash flows from Financing Activities | ||||||
Proceeds from the issuance of common stock | $ | — | $ | 8,487,127 | ||
Sales load for common stock issued | — | (126,303) | ||||
Offering costs paid for common stock issued | (5,209) | (72,955) | ||||
Stockholder distributions paid | (6,431,896) | (5,252,174) | ||||
Financing costs paid on Credit Facility | (49,969) | — | ||||
Borrowings under Credit Facility | 50,000,000 | 13,300,000 | ||||
Repayments of Credit Facility | (25,333,900) | (14,483,900) | ||||
Net Cash Provided by Financing Activities | $ | 18,179,026 | $ | 1,851,795 | ||
Net Increase (Decrease) in Cash and Cash Equivalents | $ | 22,635,980 | $ | (30,191,229) | ||
Cash and Cash Equivalents Balance at Beginning of Period | $ | 26,125,741 | $ | 48,043,329 | ||
Cash and Cash Equivalents Balance at End of Period | $ | 48,761,721 | $ | 17,852,100 | ||
Supplemental and Non-Cash Activities | ||||||
Cash paid for interest expense | $ | 10,825,557 | $ | 10,752,017 | ||
Income and excise tax paid | 1,455,741 | 303 | ||||
Increase in distributions payable | 3,215,948 | 2,699,110 | ||||
Increase in deferred offering costs | 5,209 | 2,700 | ||||
Exchange of investments | 8,256,411 | — | ||||
Reconciliation of Core Net Investment Income (1) | ||||
(Unaudited) | ||||
Three Months Ended | ||||
March 31, 2024 | March 31, 2023 | |||
Net investment income | $10,235,916 | $9,067,620 | ||
Capital gains incentive fee reversal | — | (569,528) | ||
Income tax expense | 370,719 | 374,763 | ||
Core net investment income | $10,606,635 | $8,872,855 | ||
Per share amounts: | ||||
Net investment income per share | $0.42 | $0.46 | ||
Core net investment income per share | $0.44 | $0.45 | ||
Reconciliation of Realized Net Investment Income (2) | ||||
(Unaudited) | ||||
Three Months Ended | ||||
March 31, 2024 | March 31, 2023 | |||
Net investment income | $10,235,916 | $9,067,620 | ||
Net realized loss on investments | (20,384,731) | 34,967 | ||
Net realized loss on foreign currency translation | (25,106) | (39,912) | ||
Total Realized Net Investment Income | ($10,173,921) | $9,062,675 | ||
Per share amounts: | ||||
Net investment income per share | $0.42 | $0.46 | ||
Realized net investment income per share | ($0.43) | $0.46 | ||
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SOURCE Stellus Capital Investment Corporation