Stellus Capital Investment Corporation Reports Results for its Third Fiscal Quarter Ended September 30, 2025
HOUSTON, Nov. 10, 2025 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended September 30, 2025.
Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended September 30, 2025, in which we earned U.S. GAAP net investment income of $0.32 per share, core net investment income of $0.34 per share and net realized income of $0.42 per share. During the quarter, we funded $64 million of investments and received $39 million of repayments, resulting in a total portfolio of $1.01 billion at fair value. I'm also pleased to report that our investors have received a total of $318 million in distributions, equivalent to $17.75 per share, since we began operations."
FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||
Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | ||||
Net investment income | $9.14 | $0.32 | $10.26 | $0.39 | $28.48 | $1.01 | $32.29 | $1.29 | |||
Core net investment income(1) | 9.65 | 0.34 | 10.62 | 0.40 | 29.93 | 1.06 | 33.59 | 1.34 | |||
Net realized gain (loss) on investments | 2.86 | 0.10 | (3.30) | (0.13) | (3.96) | (0.14) | (21.69) | (0.87) | |||
Net realized loss on foreign currency translation | (0.01) | — | (0.02) | — | (0.06) | — | (0.08) | — | |||
Loss on debt extinguishment | (0.16) | (0.01) | — | — | (0.16) | (0.01) | — | — | |||
Total realized income(2) | $11.83 | $0.41 | $6.94 | $0.26 | $24.30 | $0.86 | $10.52 | $0.42 | |||
Distributions | (11.43) | (0.40) | (10.63) | (0.40) | (33.89) | (1.20) | (30.32) | (1.21) | |||
Net unrealized change in (depreciation) appreciation on investments | (5.14) | (0.18) | 8.51 | 0.33 | (2.51) | (0.08) | 26.44 | 1.05 | |||
Net unrealized change in appreciation on foreign currency translation | — | — | 0.01 | — | 0.04 | — | — | — | |||
Benefit for taxes on unrealized depreciation on investments in taxable subsidiaries | — | — | — | — | — | — | 0.19 | 0.01 | |||
Net increase in net assets resulting from operations | $6.69 | $0.23 | $15.46 | $0.59 | $21.83 | $0.78 | $37.15 | $1.48 | |||
Weighted average shares outstanding | 28,480,472 | 26,326,426 | 28,168,527 | 25,066,626 | |||||||
(1) | Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements. |
(2) | Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and losses on debt extinguishment, all U.S. GAAP measures. |
PORTFOLIO ACTIVITY
($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies)
As of | As of | |||||||
September 30, 2025 | December 31, 2024 | |||||||
Investments at fair value | $1,010.2 | $953.5 | ||||||
Total assets | $1,028.6 | $980.9 | ||||||
Net assets | $377.7 | $369.9 | ||||||
Shares outstanding | 28,947,254 | 27,481,118 | ||||||
Net asset value per share | $13.05 | $13.46 | ||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||
New investments | $63.8 | $17.8 | $142.0 | $112.6 | ||||
Repayments of investments | (39.0) | (15.5) | (85.6) | (87.3) | ||||
Net activity | $24.8 | $2.3 | $56.4 | $25.3 | ||||
As of | As of | |||||||
September 30, 2025 | December 31, 2024 | |||||||
Number of portfolio company investments | 115 | 105 | ||||||
Number of debt investments | 100 | 92 | ||||||
Weighted average yield of debt and other | ||||||||
Cash | 9.0 % | 9.5 % | ||||||
Payment-in-kind ("PIK") | 0.6 % | 0.4 % | ||||||
Fee amortization | 0.4 % | 0.4 % | ||||||
Total | 10.0 % | 10.3 % | ||||||
Weighted average yield of total investments(4) | ||||||||
Cash | 8.4 % | 8.9 % | ||||||
PIK | 0.6 % | 0.4 % | ||||||
Fee amortization | 0.4 % | 0.4 % | ||||||
Total | 9.4 % | 9.7 % | ||||||
(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 equity positions and debt investments on non-accrual status. |
Results of Operations
Investment income for the three months ended September 30, 2025 and 2024 totaled $26.3 million and $26.5 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended September 30, 2025 and 2024 totaled $17.6 million and $16.2 million, respectively. For the same respective periods, base management fees totaled $4.4 million and $3.9 million, income incentive fees totaled $2.2 million and $2.6 million, fees and expenses related to our borrowings totaled $8.9 million and $8.0 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.6 million and $0.5 million, income tax totaled $0.5 million and $0.4 million and other expenses totaled $1.0 million and $0.8 million. The Company waived $0.5 million and $0.0 million of income incentive fees due to the total return limitation pursuant to the terms of the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended September 30, 2025 and 2024, respectively, for net operating expenses of $17.1 million and $16.2 million, respectively.
Net investment income was $9.1 million and $10.3 million, or $0.32 and $0.39 per common share based on 28,480,472 and 26,326,426 weighted average common shares outstanding for the three months ended September 30, 2025 and 2024, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes capital gains incentive fees (reversals) and income tax expense accruals, for the three months ended September 30, 2025 and 2024 was $9.7 million and $10.6 million, or $0.34 and $0.40 per share, respectively.
For the three months ended September 30, 2025 and 2024, the Company's investment portfolio had a net change in unrealized (depreciation) appreciation of ($5.1) million and $8.5 million, respectively, and the Company had net realized gains (losses) of $2.9 million and ($3.3) million, respectively.
Net increase in net assets resulting from operations totaled $6.7 million and $15.5 million, or $0.23 and $0.59 per common share, based on 28,480,472 and 26,326,426 weighted average common shares outstanding for the three months ended September 30, 2025 and 2024, respectively.
Liquidity and Capital Resources
As of September 30, 2025, 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 $335.0 million on a committed basis. As of September 30, 2025 and December 31, 2024, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $365.0 million and $350.0 million, respectively.
As of September 30, 2025 and December 31, 2024, the Company had $167.6 million and $175.4 million in outstanding borrowings under the Credit Facility, respectively.
The Company issued 531,106 shares during the three months ended September 30, 2025 under the at-the-market equity program ("ATM Program") for gross proceeds of $7.4 million. The average per share offering price of shares issued under the ATM Program during the three months ended September 30, 2025 was $14.00.
Distributions
For both the three months ended September 30, 2025 and 2024, the Company declared aggregate distributions of $0.40 per share for both periods ($11.4 million and $10.6 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 September 30, 2025:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
Add-On Investment | July 28, 2025 | Equine Network, LLC* | Hosts competitions and provides services for the U.S. equine | $ | 2,122,453 | Senior Secured – First Lien | |||||
New Investment | July 31, 2025 | The Millennium Alliance, LLC | Facilitator of peer-to-peer events connecting companies with | $ | 11,500,000 | Senior Secured – First Lien | |||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 515,556 | Equity | |||||||||
New Investment | July 31, 2025 | Elder Care Opco LLC | Provider of homecare services | $ | 7,785,007 | Senior Secured – First Lien | |||||
$ | 2,500,000 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 910,966 | Equity | |||||||||
Add-On Investment | August 4, 2025 | Guidant Corp.* | Provider of liquid metering products and integrated solutions to the | $ | 66,030 | Equity | |||||
Add-On Investment | August 5, 2025 | MedLearning Group, LLC* | Provider of continuing medical education services | $ | 1,000,000 | Senior Secured – First Lien | |||||
Add-On Investment | August 21, 2025 | Invincible Boat Company LLC* | Manufacturer and marketer of ultra-premium saltwater fishing boats | $ | 531,915 | Revolver Commitment | |||||
New Investment | August 22, 2025 | DMD Systems Recovery, LLC | Provider of IT asset disposition services | $ | 6,100,000 | Senior Secured – First Lien | |||||
$ | 1,000,000 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 180,000 | Equity | |||||||||
Add-On Investment | August 29, 2025 | Compost 360 Acquisition, LLC* | Organic waste recycler and producer of compost, mulch, and | $ | 27,630 | Equity | |||||
New Investment | September 19, 2025 | Champion Services Acquireco LLC | Provider of commercial re-roofing and restoration services | $ | 12,000,000 | Senior Secured – First Lien | |||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 268,889 | Equity | |||||||||
New Investment | September 22, 2025 | DFO Enterprises, LLC | Manufacturer of fiber optic cable assembly equipment, consumables, | $ | 11,580,474 | Senior Secured – First Lien | |||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 412,252 | Equity | |||||||||
*Existing portfolio company |
The Company realized investments in the following portfolio companies during the three months ended September 30, 2025:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Gain (Loss) | Instrument Type | ||||||||
Full Realization | July 3, 2025 | EOS Fitness Holdings, LLC | Gym franchise operator | $ | 2,799,098 | $ | 2,799,098 | Equity | ||||||
Full Repayment | July 31, 2025 | Rogers Mechanical Contractors, | HVAC and plumbing designer, | $ | 8,272,652 | $ | — | Senior Secured – First Lien | ||||||
Full Repayment | August 21, 2025 | CompleteCase, LLC | Provider of online uncontested | $ | 6,287,212 | $ | — | Senior Secured – First Lien | ||||||
Full Repayment | September 18, 2025 | Cafe Valley, Inc. | Wholesale bakery serving the | $ | 15,284,524 | $ | — | Senior Secured – First Lien | ||||||
*Existing portfolio company |
Events Subsequent to September 30, 2025
The Company's management has evaluated subsequent events through November 10, 2025. 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 September 30, 2025:
Activity Type | Date | Company Name | Company Description | Investment Amount | Instrument Type | ||||||
Add-On Investment | October 1, 2025 | The Hardenbergh Group, Inc.* | Provider of patient safety, clinical risk mitigation, and | $ | 500,000 | Senior Secured – First Lien | |||||
Add-On Investment | October 3, 2025 | EH Real Estate Services, LLC* | Offers residential property brokerage, title & | $ | 183,470 | Senior Secured – First Lien | |||||
Add-On Investment | October 17, 2025 | J.R. Watkins, LLC* | Manufacturer and distributor of home and personal | $ | 18,000 | Priority Revolver Commitment | |||||
New Investment | October 17, 2025 | Fidus Systems Inc. | Provider of outsourced electronic product | $ | 4,759,099 | Senior Secured – First Lien | |||||
$ | 3,172,733 | Delayed Draw Term Loan Commitment | |||||||||
$ | 100,000 | Revolver Commitment | |||||||||
$ | 267,728 | Equity | |||||||||
Add-On Investment | November 6, 2025 | Mobotrex Acquisition, LLC* | Distributor and manufacturer of intelligent traffic | $ | 3,523,787 | Senior Secured – First Lien | |||||
$ | 1,549,698 | Delayed Draw Term Loan Commitment | |||||||||
$ | 73,776 | Revolver Commitment | |||||||||
Add-On Investment | November 6, 2025 | Ad.Net Acquisition, LLC* | A digital marketing company that targets | $ | 1,896,568 | Senior Secured – First Lien | |||||
$ | 85,027 | Equity | |||||||||
*Existing portfolio company |
The Company realized investments in the following portfolio companies subsequent to September 30, 2025:
Activity Type | Date | Company Name | Company Description | Proceeds Received | Realized Gain | Instrument Type | ||||||||
Full Repayment | October 25, 2025 | Heartland Business Systems, LLC | End-to-end information technologies | $ | 9,725,000 | $ | — | Senior Secured – First Lien | ||||||
$ | 48,875 | $ | — | Delayed Draw Term Loan | ||||||||||
Full Repayment | November 3, 2025 | NuSource Financial Acquisition, Inc. | Provider of technology integration | $ | 7,014,746 | $ | — | Unsecured | ||||||
Full Realization | $ | 1,066,715 | $ | 1,066,715 | Warrants | |||||||||
Credit Facility
The outstanding balance under the Credit Facility as of November 10, 2025 was $182.8 million.
Distributions Declared
On October 8, 2025, the Board of Directors of the Company declared a regular monthly dividend for each of October 2025, November 2025, and December 2025 as follows:
Ex-Dividend | Record | Payment | Amount per | ||||||
Declared | Date | Date | Date | Share | |||||
10/8/2025 | 10/31/2025 | 10/31/2025 | 11/14/2025 | $ | 0.1333 | ||||
10/8/2025 | 11/28/2025 | 11/28/2025 | 12/15/2025 | $ | 0.1333 | ||||
10/8/2025 | 12/31/2025 | 12/31/2025 | 1/15/2026 | $ | 0.1333 | ||||
Conference Call Information
Stellus Capital Investment Corporation will host a conference call to discuss these results on Wednesday, November 12, 2025 at 10:00 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 118871. Starting approximately two hours after the conclusion of the call, a replay will be available through Wednesday, November 26, 2025 by dialing (877) 481-4010 and entering passcode 53167. 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. 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 lower middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) with a focus on investing through first lien (including unitranche) loans, often with a corresponding equity investment. 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 | |||||||
September 30, 2025 | |||||||
(unaudited) | December 31, 2024 | ||||||
ASSETS | |||||||
Controlled investments at fair value (amortized cost of $33,202,703 | $ | 13,568,095 | $ | 7,652,436 | |||
Non-controlled, non-affiliated investments, at fair value (amortized cost of | 996,641,541 | 945,845,252 | |||||
Cash and cash equivalents | 9,024,020 | 20,058,594 | |||||
Receivable for sales and repayments of investments | 437,552 | 335,689 | |||||
Interest receivable | 7,047,686 | 4,947,765 | |||||
Income tax receivable | 1,522,198 | 1,301,965 | |||||
Other receivables | 99,111 | 87,995 | |||||
Related party receivable | 22,500 | 3,687 | |||||
Prepaid expenses | 281,634 | 666,866 | |||||
Total Assets | $ | 1,028,644,337 | $ | 980,900,249 | |||
LIABILITIES | |||||||
Notes Payable | $ | 172,522,707 | $ | 99,444,355 | |||
Credit Facility payable | 163,995,602 | 172,314,315 | |||||
SBA-guaranteed debentures | 295,805,634 | 321,251,939 | |||||
Dividends payable | 3,858,669 | 3,663,233 | |||||
Management fees payable | 4,401,305 | 4,034,109 | |||||
Income incentive fees payable | 2,642,033 | 3,109,560 | |||||
Interest payable | 5,912,375 | 5,281,343 | |||||
Related party payable | 136,535 | — | |||||
Unearned revenue | 640,637 | 548,626 | |||||
Administrative services payable | 507,139 | 393,513 | |||||
Other accrued expenses and liabilities | 491,374 | 937,316 | |||||
Total Liabilities | $ | 650,914,010 | $ | 610,978,309 | |||
Commitments and contingencies (Note 7) | |||||||
Net Assets | $ | 377,730,327 | $ | 369,921,940 | |||
NET ASSETS | |||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,947,254 | $ | 28,947 | $ | 27,481 | |||
Paid-in capital | 399,410,630 | 379,549,272 | |||||
Total distributable loss | (21,709,250) | (9,654,813) | |||||
Net Assets | $ | 377,730,327 | $ | 369,921,940 | |||
Total Liabilities and Net Assets | $ | 1,028,644,337 | $ | 980,900,249 | |||
Net Asset Value Per Share | $ | 13.05 | $ | 13.46 | |||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||||||||
For the three months ended | For the nine months ended | ||||||||||||
September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||||
INVESTMENT INCOME | |||||||||||||
From controlled investments: | |||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | 81,636 | |||||
From non-controlled, non-affiliated investments | |||||||||||||
Interest income | 23,634,587 | 24,403,375 | 69,923,357 | 72,969,302 | |||||||||
Payment-in-kind interest income | 1,378,166 | 934,986 | 3,870,717 | 2,490,854 | |||||||||
Other income | 1,262,956 | 1,159,898 | 3,129,895 | 3,579,415 | |||||||||
Total Investment Income | $ | 26,275,709 | $ | 26,498,259 | $ | 76,923,969 | $ | 79,121,207 | |||||
OPERATING EXPENSES | |||||||||||||
Management fees | $ | 4,401,305 | $ | 3,959,554 | $ | 12,735,472 | $ | 11,664,020 | |||||
Valuation fees | 172,364 | 151,535 | 368,760 | 343,753 | |||||||||
Administrative services expenses | 592,409 | 469,274 | 1,515,991 | 1,441,436 | |||||||||
Income incentive fees | 2,166,047 | 2,564,922 | 6,460,613 | 7,616,562 | |||||||||
Professional fees | 395,098 | 312,034 | 1,125,937 | 847,866 | |||||||||
Directors' fees | 93,250 | 93,250 | 297,750 | 315,750 | |||||||||
Insurance expense | 99,248 | 126,362 | 295,006 | 376,840 | |||||||||
Interest expense and other fees | 8,949,075 | 7,956,403 | 25,892,109 | 23,840,473 | |||||||||
Income tax expense | 515,686 | 360,192 | 1,444,184 | 1,304,948 | |||||||||
Other general and administrative expenses | 227,037 | 245,043 | 945,690 | 908,185 | |||||||||
Total Operating Expenses | $ | 17,611,519 | $ | 16,238,569 | $ | 51,081,512 | $ | 48,659,833 | |||||
Income incentive fee waiver | (471,251) | — | (2,643,020) | (1,826,893) | |||||||||
Total Operating Expenses, net of fee waivers | $ | 17,140,268 | $ | 16,238,569 | $ | 48,438,492 | $ | 46,832,940 | |||||
Net Investment Income | $ | 9,135,441 | $ | 10,259,690 | $ | 28,485,477 | $ | 32,288,267 | |||||
Net realized loss on controlled investments | $ | — | $ | — | $ | (1,132,576) | $ | — | |||||
Net realized gain (loss) on non-controlled, non-affiliated | 2,867,155 | (3,297,615) | (2,827,517) | (21,689,864) | |||||||||
Net realized loss on foreign currency translations | (9,422) | (22,095) | (59,080) | (76,990) | |||||||||
Loss on debt extinguishment | (164,762) | — | (164,762) | — | |||||||||
Net change in unrealized appreciation on controlled | 51,367 | 248,746 | 1,397,134 | 923,505 | |||||||||
Net change in unrealized (depreciation) appreciation on | (5,187,426) | 8,255,272 | (3,906,233) | 25,512,422 | |||||||||
Net change in unrealized (depreciation) appreciation on | (325) | 14,588 | 38,540 | 5,099 | |||||||||
Benefit for taxes on net unrealized depreciation on investments | — | — | — | 188,893 | |||||||||
Benefit for taxes on net realized loss on investments | — | 2,221 | — | 2,221 | |||||||||
Net Increase in Net Assets Resulting from Operations | $ | 6,692,028 | $ | 15,460,807 | $ | 21,830,983 | $ | 37,153,553 | |||||
Net Investment Income Per Share—basic and diluted | $ | 0.32 | $ | 0.39 | $ | 1.01 | $ | 1.29 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 0.23 | $ | 0.59 | $ | 0.78 | $ | 1.48 | |||||
Weighted Average Shares of Common Stock | 28,480,472 | 26,326,426 | 28,168,527 | 25,066,626 | |||||||||
Distributions Per Share—basic and diluted | $ | 0.40 | $ | 0.40 | $ | 1.20 | $ | 1.21 | |||||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited) | ||||||||||||||
Common Stock | Total | |||||||||||||
Number | Par | Paid-in | distributable | |||||||||||
of shares | value | capital | (loss) | Net Assets | ||||||||||
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 | |||||
Net investment income | — | — | — | 11,792,661 | 11,792,661 | |||||||||
Net realized gain on investments | — | — | — | 1,992,482 | 1,992,482 | |||||||||
Net realized loss on foreign currency translations | — | — | — | (29,789) | (29,789) | |||||||||
Net change in unrealized depreciation on investments | — | — | — | (5,586,681) | (5,586,681) | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | (5,887) | (5,887) | |||||||||
Benefit for taxes on unrealized depreciation on investments | — | — | — | 381,500 | 381,500 | |||||||||
Distributions from net investment income | — | — | — | (10,049,073) | (10,049,073) | |||||||||
Issuance of common stock, net of offering costs(1) | 1,855,356 | 1,856 | 25,248,020 | — | 25,249,876 | |||||||||
Balances at June 30, 2024 | 25,980,998 | $ | 25,981 | $ | 361,167,004 | $ | (14,007,492) | $ | 347,185,493 | |||||
Net investment income | — | — | — | 10,259,690 | 10,259,690 | |||||||||
Net realized loss on investments | — | — | — | (3,297,615) | (3,297,615) | |||||||||
Net realized loss on foreign currency translation | — | — | — | (22,095) | (22,095) | |||||||||
Net change in unrealized appreciation on investments | — | — | — | 8,504,018 | 8,504,018 | |||||||||
Net change in unrealized appreciation on foreign currency translations | — | — | — | 14,588 | 14,588 | |||||||||
Benefit for taxes on net realized loss on investments | — | — | — | 2,221 | 2,221 | |||||||||
Distributions from net investment income | — | — | — | (10,625,512) | (10,625,512) | |||||||||
Issuance of common stock, net of offering costs(1) | 1,058,366 | 1,058 | 14,263,441 | — | 14,264,499 | |||||||||
Balances at September 30, 2024 | 27,039,364 | $ | 27,039 | $ | 375,430,445 | $ | (9,172,197) | $ | 366,285,287 | |||||
Balances at December 31, 2024 | 27,481,118 | $ | 27,481 | $ | 379,549,272 | $ | (9,654,813) | $ | 369,921,940 | |||||
Net investment income | — | — | — | 9,788,809 | 9,788,809 | |||||||||
Net realized loss on investments | — | — | — | (5,967,221) | (5,967,221) | |||||||||
Net realized loss on foreign currency translations | — | — | — | (29,655) | (29,655) | |||||||||
Net change in unrealized appreciation on investments | — | — | — | 1,193,293 | 1,193,293 | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | 8,319 | 8,319 | |||||||||
Distributions from net investment income | — | — | — | (11,087,389) | (11,087,389) | |||||||||
Issuance of common stock, net of offering costs(1) | 656,085 | 656 | 8,937,430 | — | 8,938,086 | |||||||||
Balances at March 31, 2025 | 28,137,203 | $ | 28,137 | $ | 388,486,702 | $ | (15,748,657) | $ | 372,766,182 | |||||
Net investment income | — | — | — | 9,561,227 | 9,561,227 | |||||||||
Net realized loss on investments | — | — | — | (860,027) | (860,027) | |||||||||
Net realized loss on foreign currency translations | — | — | — | (20,003) | (20,003) | |||||||||
Net change in unrealized appreciation on investments | — | — | — | 1,433,667 | 1,433,667 | |||||||||
Net change in unrealized appreciation on foreign currency translations | — | — | — | 30,546 | 30,546 | |||||||||
Distributions from net investment income | — | — | — | (11,363,618) | (11,363,618) | |||||||||
Issuance of common stock, net of offering costs(1) | 278,945 | 279 | 3,822,637 | — | 3,822,916 | |||||||||
Balances at June 30, 2025 | 28,416,148 | $ | 28,416 | $ | 392,309,339 | $ | (16,966,865) | $ | 375,370,890 | |||||
Net investment income | — | — | — | 9,135,441 | 9,135,441 | |||||||||
Net realized gain on investments | — | — | — | 2,867,155 | 2,867,155 | |||||||||
Net realized loss on foreign currency translations | — | — | — | (9,422) | (9,422) | |||||||||
Loss on debt extinguishment | — | — | — | (164,762) | (164,762) | |||||||||
Net change in unrealized depreciation on investments | — | — | — | (5,136,059) | (5,136,059) | |||||||||
Net change in unrealized depreciation on foreign currency translations | — | — | — | (325) | (325) | |||||||||
Distributions from net investment income | — | — | — | (11,434,413) | (11,434,413) | |||||||||
Issuance of common stock, net of offering costs(1) | 531,106 | 531 | 7,101,291 | — | 7,101,822 | |||||||||
Balances at September 30, 2025 | 28,947,254 | $ | 28,947 | $ | 399,410,630 | $ | (21,709,250) | $ | 377,730,327 | |||||
STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||
For the nine months ended | ||||||
September 30, 2025 | September 30, 2024 | |||||
Cash Flows from Operating Activities | ||||||
Net increase in net assets resulting from operations | $ | 21,830,983 | $ | 37,153,553 | ||
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: | ||||||
Purchases of investments | (141,983,167) | (112,624,812) | ||||
Proceeds from sales and repayments of investments | 85,635,632 | 87,308,914 | ||||
Net change in unrealized depreciation (appreciation) on investments | 2,509,099 | (26,435,927) | ||||
Net change in unrealized appreciation on foreign currency translations | (37,811) | (5,099) | ||||
Increase in investments due to PIK | (3,870,717) | (2,490,856) | ||||
Amortization of premium and accretion of discount, net | (2,172,972) | (2,045,992) | ||||
Deferred tax benefit | — | (188,893) | ||||
Amortization of loan structure fees | 954,033 | 825,891 | ||||
Amortization of deferred financing costs | 447,751 | 335,345 | ||||
Amortization of discount on Notes Payable | 63,395 | — | ||||
Amortization of loan fees on SBA-guaranteed debentures | 553,695 | 784,763 | ||||
Net realized loss on investments | 3,960,093 | 21,689,864 | ||||
Loss on debt extinguishment | 164,762 | — | ||||
Changes in other assets and liabilities | ||||||
Increase in interest receivable | (2,099,921) | (1,389,856) | ||||
Increase in income tax receivable | (220,233) | (228,663) | ||||
Increase in other receivables | (11,116) | (25,000) | ||||
Increase in related party receivables | (18,813) | — | ||||
Decrease in prepaid expenses | 385,232 | 349,950 | ||||
Increase in management fees payable | 367,196 | 1,041,018 | ||||
(Decrease) increase in income incentive fees payable | (467,527) | 269,396 | ||||
Increase (decrease) in administrative services payable | 113,626 | (1,118) | ||||
Increase (decrease) in interest payable | 631,032 | (3,988,133) | ||||
Increase in related party payable | 136,535 | 1,898,854 | ||||
Increase in unearned revenue | 92,011 | 152,623 | ||||
(Decrease) increase in other accrued expenses and liabilities | (445,942) | 718,139 | ||||
Net Cash (Used) Provided in Operating Activities | $ | (33,483,144) | $ | 3,103,961 | ||
Cash Flows from Financing Activities | ||||||
Proceeds from the issuance of common stock | $ | 20,588,960 | $ | 40,370,901 | ||
Sales load for common stock issued | (308,998) | (606,145) | ||||
Offering costs paid for common stock issued | (417,138) | (243,067) | ||||
Stockholder distributions paid | (33,689,984) | (26,718,082) | ||||
Proceeds from issuance of Notes Payable | 125,000,000 | — | ||||
Repayment of Notes Payable | (50,000,000) | — | ||||
Premium from issuance of Notes Payable | 648,000 | — | ||||
Discount from issuance of Notes Payable | (770,250) | — | ||||
Financing costs paid on Notes Payable | (2,475,306) | — | ||||
Repayments of SBA-guaranteed debentures | (26,000,000) | — | ||||
Financing costs paid on Credit Facility | (1,525,014) | (101,348) | ||||
Borrowings under Credit Facility | 198,900,000 | 122,400,000 | ||||
Repayments of Credit Facility | (207,501,700) | (125,751,700) | ||||
Net Cash Provided by Financing Activities | $ | 22,448,570 | $ | 9,350,559 | ||
Net (Decrease) Increase in Cash and Cash Equivalents | $ | (11,034,574) | $ | 12,454,520 | ||
Cash and Cash Equivalents Balance at Beginning of Period | $ | 20,058,594 | $ | 26,125,741 | ||
Cash and Cash Equivalents Balance at End of Period | $ | 9,024,020 | $ | 38,580,261 | ||
Supplemental and Non-Cash Activities | ||||||
Cash paid for interest expense | $ | 24,940,287 | $ | 25,882,607 | ||
Income and excise tax paid | 1,664,417 | 1,533,611 | ||||
Exchange of investments | 1,663,301 | 8,256,411 | ||||
Reconciliation of Core Net Investment Income(1) (Unaudited) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||
Net investment income | $9,135,441 | $10,259,690 | $28,485,477 | $32,288,267 | ||||
Income tax expense | 515,686 | 360,192 | 1,444,184 | 1,304,948 | ||||
Core net investment income | $9,651,127 | $10,619,882 | $29,929,661 | $33,593,215 | ||||
Per share amounts: | ||||||||
Net investment income per share | $0.32 | $0.39 | $1.01 | $1.29 | ||||
Core net investment income per share | $0.34 | $0.40 | $1.06 | $1.34 | ||||
Reconciliation of Realized Net Investment Income(2) (Unaudited) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||
Net investment income | $9,135,441 | $10,259,690 | $28,485,477 | $32,288,267 | ||||
Net realized gain (loss) on investments | 2,867,155 | (3,297,615) | (3,960,093) | (21,689,864) | ||||
Net realized loss on foreign currency translation | (9,422) | (22,095) | (59,080) | (76,990) | ||||
Benefit for taxes on net realized loss on investments | — | 2,221 | — | 2,221 | ||||
Loss on debt extinguishment | (164,762) | — | (164,762) | — | ||||
Total realized net investment income | $11,828,412 | $6,942,201 | $24,301,542 | $10,523,634 | ||||
Per share amounts: | ||||||||
Net investment income per share | $0.32 | $0.39 | $1.01 | $1.29 | ||||
Realized net investment income per share | $0.42 | $0.26 | $0.86 | $0.42 | ||||
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SOURCE Stellus Capital Investment Corporation