- GAAP Net Investment Income (“GAAP NII”) was $7.1 million, or
$0.10 per share, up 10% from the prior quarter, providing second
quarter distribution coverage of 97%, up from 88% in the prior
quarter.
- Adjusted Net Investment Income1 (“Adjusted NII”) was $6.0
million, or $0.08 per share, providing second quarter adjusted
distribution coverage of 82%, consistent with the prior
quarter.
- Net Asset Value (“NAV”) decreased to $335.4 million, down 3.3%
from $346.9 million as of March 31, 2022; NAV per share decreased
by 2.8% to $4.57 per share from $4.70 per share as of March 31,
2022, primarily driven by net unrealized losses of $(9.7) million
during the quarter resulting from spread widening and general
market declines.
- The Company had strong gross deployments totaling $73.5 million
during the second quarter, substantially all of which were
investments in senior secured debt. During the second quarter, 11
new portfolio companies were added, bringing total portfolio
companies at quarter-end to 100, up from 86 at the end of 2021 and
55 at the end of 2020. Gross repayments during the second quarter
were $25.1 million.
- The Company’s weighted-average portfolio yield as of June 30,
2022 increased to 9.1% based on total portfolio fair value, up from
8.4% as of March 31, 2022. The increase was largely driven by a
rise in LIBOR and SOFR rates as well as slightly wider spreads on
new originations during the quarter.
- Net leverage was 0.64x as of June 30, 2022, and was up from
0.46x as of March 31, 2022, primarily driven by net investment
deployments during the second quarter and a higher average debt
balance quarter over quarter. Total available liquidity for
deployment into portfolio company investments, including cash, was
approximately $141 million, subject to leverage and borrowing base
restrictions.
- Under the existing share repurchase program, 420,083 shares
were repurchased during the second quarter for approximately $1.6
million at an average price of $3.78 per share, including brokerage
commissions.
- As previously announced, the Company issued $92.0 million in
aggregate principal amount of senior unsecured notes (the “Notes”)
in two tranches to qualified institutional investors in a private
placement on June 9, 2022. The Company used the Notes proceeds as
well as availability under the revolver to repay the Company’s
$143.7 million of outstanding 5.00% unsecured convertible notes
(the “2022 Convertible Notes”) on their June 15, 2022 maturity
date.
BlackRock Capital Investment Corporation (NASDAQ:BKCC) (“BCIC”
or the “Company,” “we,” “us” or “our”) announced today that its
Board of Directors declared a quarterly distribution of $0.10 per
share, payable on October 6, 2022 to stockholders of record at the
close of business on September 15, 2022.
______________________________________
1Adjusted NII excludes the reversal of
“hypothetical liquidation” basis capital gains incentive fee
accrual required under GAAP of approximately $(1.1) million in the
second quarter of 2022 and $(0.5) million in the first quarter of
2022, respectively (refer to Supplemental Information for further
details).
“We delivered another quarter of strong results and solid
origination activity, making further progress in our commitment to
build a diversified portfolio with solid risk-adjusted returns,”
said James E. Keenan, Chairman and Interim CEO of the Company.
“Drawing upon the power of the BlackRock platform, we added 11 new
portfolio companies during the quarter, substantially all of which
were in senior secured debt. We reached a milestone of 100
portfolio companies, representing significant progress from 47 at
the end of 2019.”
“We deployed nearly $74 million in the second quarter –
primarily in first lien loans. Approximately 74% of our portfolio
consists of first lien investments, consistent with the end of 2021
and up from 34% at the end of 2019. Likewise, non-core investments
have continued to decline as a percentage of our portfolio from 16%
at the end of 2019 down to just 4% as of the end of this quarter,
demonstrating our continued focus on strengthening the portfolio’s
asset quality,” Mr. Keenan continued.
“In the third quarter so far, we are seeing a continuation of
the level of deployment activity that we have seen in the first
half of this year. We are also seeing pricing and structures more
favorable to lenders in the private credit market. Amidst the
macroeconomic backdrop of high inflation, rising interest rates and
slowing consumer demand, we remain vigilant in new underwriting as
well as in monitoring our existing portfolio. We believe that our
portfolio is well positioned to withstand the impacts of an
economic downcycle. During the second quarter, there were no new
non-accruals or amendments that resulted in a payment deferral,”
Mr. Keenan continued.
June 30, 2022
December 31, 2021
December 31, 2020
December 31, 2019
Portfolio Composition
First Lien Debt
74%
74%
50%
34%
Second Lien Debt
20%
19%
27%
23%
Junior Capital1
6%
7%
23%
43%
Portfolio Company Count
100
86
55
47
Non-Core
Assets
Portfolio Company Count2
4
5
6
9
Fair Market Value ("FMV", in Millions)
23
26
42
120
% of investments, at FMV
4%
5%
9%
16%
______________________________________ 1 Includes
unsecured/subordinated debt and equity investments. 2 Excludes
portfolio companies with zero FMV.
“We are also pleased with our liability management during the
quarter, having issued $92.0 million of aggregate principal amount
of Notes, which were used along with the proceeds from our revolver
to repay our $143.7 million of 2022 Convertible Notes at their
maturity in June. As a result of these transactions and combined
with our robust net deployments during the quarter, net leverage
increased to 0.64x at June 30 from 0.46x at the end of the prior
quarter. We maintain ample leverage capacity as we pursue
disciplined portfolio growth that we expect will be accretive to
NII and provide increased dividend coverage for our stockholders as
we progress through the second half of the year,” Mr. Keenan
concluded.
Financial Highlights
Q2 2022
Q1 2022
Q2 2021
($'s in millions, except per share
data)2
Total Amount
Per Share
Total Amount
Per Share
Total Amount
Per Share
Net Investment Income/(loss)
$7.1
$0.10
$6.5
$0.09
$4.8
$0.07
Net realized and unrealized
gains/(losses)
$(9.7)
$(0.13)
$(1.0)
$(0.01)
$27.2
$0.36
Basic earnings/(losses)
$(2.5)
$(0.03)
$5.5
$0.07
$32.0
$0.43
Distributions declared
$7.4
$0.10
$7.4
$0.10
$7.4
$0.10
Net Investment Income/(loss), as
adjusted1
$6.0
$0.08
$6.0
$0.08
$4.8
$0.07
Basic earnings/(losses), as adjusted1
$(3.6)
$(0.05)
$5.1
$0.07
$32.0
$0.43
______________________________________
1Non-GAAP basis financial measure,
excluding the hypothetical liquidation basis capital gain incentive
fee accrual (reversal) under GAAP. See Supplemental
Information.
2Totals may not foot due to rounding.
($'s in millions, except per share
data)
June 30, 2022
March 31, 2022
December 31, 2021
June 30, 2021
Total assets
$585.3
$533.3
$572.0
$571.7
Investment portfolio, at FMV
$557.4
$517.8
$552.6
$549.3
Debt outstanding
$237.0
$171.6
$196.9
$193.9
Total net assets
$335.4
$346.9
$349.7
$347.2
Net asset value per share
$4.57
$4.70
$4.73
$4.68
Net leverage ratio1
0.64x
0.46x
0.56x
0.56x
______________________________________
1 Calculated as the ratio between (A)
debt, excluding unamortized debt issuance costs, less available
cash and receivable for investments sold, plus payables for
investments purchased, and (B) NAV.
Business Updates
- Issuance of Senior Unsecured
Debt: As previously disclosed, on April 21, 2022, the
Company entered into a Note Purchase Agreement governing the
issuance on June 9, 2022, of $92.0 million in aggregate principal
amount of Notes in two tranches to qualified institutional
investors in a private placement. The Company issued $35.0 million
in aggregate principal amount of Notes with a fixed interest rate
of 5.82%, and $57.0 million in aggregate principal amount of Notes
bearing interest at a rate equal to SOFR plus 3.14%. The Notes have
a maturity date of December 9, 2025. The Company may prepay the
Notes at its option, subject to a prepayment premium, in an amount
equal to 2% during the first year, 1% during the second year, 0.5%
during the third year and none thereafter. In addition, the Company
will be obligated to offer to repay the Notes at par if certain
change in control events occur. The Notes are general unsecured
obligations of the Company that rank pari passu with all
outstanding and future unsecured unsubordinated indebtedness issued
by the Company. The Company has entered into an interest rate swap
agreement with a notional value of $35.0 million for the first
three years of the Notes’ term, pursuant to which the Company will
pay a floating rate of interest equal to SOFR and will receive a
fixed rate of interest equal to 2.633%. For more information,
please refer to the Form 8-K as filed with the Securities and
Exchange Commission (the “SEC”) on April 22, 2022.
- Repayment of 2022 Convertible
Notes: On June 15, 2022, the Company’s 2022 Convertible
Notes matured and the Company fully repaid the aggregate
outstanding $143.7 million principal amount (post noteholder
conversion) plus outstanding accrued interest. During the quarter,
$30,000 of principal was converted to the Company’s common stock at
the noteholders’ option pursuant to the terms of the 2022
Convertible Notes indenture.
- Other Junior Capital
Exposure: As of June 30, 2022, the Company’s other
junior capital (including unsecured/subordinated debt and equity)
exposure, excluding non-core assets, remained low at 5% of the
portfolio, down from 6% at December 31, 2021, 21% at December 31,
2020, and 40% at December 31, 2019. During the second quarter, the
Company received a partial repayment of $4.2 million on the
unsecured debt of Gordon Brothers Finance Company (“GBFC”), a
non-accrual investment.
- Share Repurchase Program:
On November 2, 2021, the Company’s Board of Directors authorized
the Company to purchase up to a total of 8,000,000 shares,
effective until the earlier of November 2, 2022, or such time that
all the authorized shares have been repurchased. During the second
quarter, 420,083 shares were repurchased for $1,586,451 at an
average price of $3.78 per share, including brokerage commissions.
As of June 30, 2022, 7,380,503 shares remained authorized for
repurchase.
Second Quarter Financial Updates
- GAAP NII was $7.1 million, or approximately $0.10 per share,
for the three months ended June 30, 2022 (and Adjusted NII was $6.0
million or $0.08 per share). Relative to distributions declared of
$0.10 per share, GAAP NII distribution coverage was 97%, up from
88% from the prior quarter. Adjusted NII distribution coverage was
82% for the second quarter, which is consistent with the prior
quarter.
- NAV decreased to $335.4 million at June 30, 2022, down 3.3%
from $346.9 million at March 31, 2022; NAV per share decreased 2.8%
to $4.57 per share from the prior quarter, primarily driven by net
unrealized losses of $(9.7) million on the portfolio.
- For the quarter ended June 30, 2022, we incurred management
fees of $1.9 million, and incentive fees based on income of $0.1
million. The payment of the $0.1 million incentive fees based on
income was deferred pursuant to our investment management
agreement.
- GAAP requires that the capital gains incentive fee accrual
consider unrealized capital appreciation, as a capital gains
incentive fee would be payable if such unrealized capital
appreciation were realized on a “hypothetical liquidation” basis.
Additionally, if the resulting calculation amount is negative or,
if at the end of the annual measurement period (or every June 30)
unrealized capital appreciation has not been realized, the accrual
for GAAP may result in the reduction or reversal of incentive fees
on capital gains previously accrued. For the quarter ended June 30,
2022, a capital gains incentive fees reduction of $(1.1) million
was recorded on that basis (refer to Supplemental Information below
for further details) and at June 30, 2022, the balance of accrued
incentive fees on capital gains was zero. There can be no assurance
that such unrealized capital appreciation will actually be realized
during each annual measurement period, or that any accrued capital
gains incentive fee will become payable under our investment
management agreement or the Investment Advisers Act of 1940.
Amounts ultimately paid under the investment management agreement
will be consistent with the formula reflected in the
agreement.
Portfolio and Investment Activity*
Three Months Ended
($’s in millions)
June 30, 2022
March 31, 2022
June 30, 2021
Investment deployments
$73.5
$44.0
$88.9
Investment exits
$25.1
$78.7
$25.4
Number of portfolio company investments at
the end of period
100
93
74
Weighted average yield of debt and income
producing equity securities, at FMV
9.3%
8.5%
8.6%
% of Portfolio invested in Secured debt,
at FMV
94%
92%
85%
% of Portfolio invested in
Unsecured/subordinated debt, at FMV
4%
5%
5%
% of Portfolio invested in Equity, at
FMV
2%
3%
10%
Average investment by portfolio company,
at amortized cost
$6.3
$6.3
$8.4
*Balance sheet amounts and yield
information above are as of period end
- We deployed $73.5 million during the quarter while exits and
repayments totaled $25.1 million, resulting in a $48.4 million net
increase in our portfolio.
- Deployments consisted of eleven new portfolio companies and six
investments/fundings into existing portfolio companies, which are
outlined as follows: New Portfolio
Companies
- $11.4 million SOFR (“S”) + 7.50% first lien term loan to
InMoment, Inc., a provider of customer experience management
software and analytical solutions;
- $7.4 million S + 5.75% first lien term loan, $0.5 million
unfunded delayed draw term loan, and $0.5 million unfunded revolver
to Kaseya Inc., a provider of cloud-based IT management
solutions;
- $5.5 million S + 6.00% first lien term loan, and $0.6 million
unfunded revolver to SEP Eiger Bidco Ltd. (Beqom), a global
provider of compensation management software;
- $5.2 million S + 6.25% first lien term loan and $0.4 million
unfunded revolver to OCM Luxembourg Baccarat Bidco S.A.R.L.
(Interblock), a developer, supplier and lessor of electronic table
game products;
- $5.0 million S + 7.75% second lien term loan to DTI Holdco,
Inc. (Epiq Systems, Inc.), a global technology enabled legal
service provider, offering solutions to corporate and law firm
clients;
- $3.8 million S + 6.00% first lien term loan and $1.5 million
unfunded delayed draw term loan to PHC Buyer, LLC (Patriot Home
Care), a provider of home personal care services;
- $3.3 million S + 6.00% first lien term loan, $0.2 million
funded revolver (with an additional $0.3 million unfunded portion),
and $1.1 million unfunded delayed draw term loan to CSG Buyer, Inc.
(Core States), a provider of architectural, design, engineering,
specialty program management services and signage solutions;
- $2.6 million S + 6.50% first lien term loan to Peloton
Interactive, Inc., a provider of connected fitness products and
subscription-based streaming of instructor-led fitness
classes;
- $1.5 million S + 7.25% first lien term loan and $1.5 million
unfunded delayed draw term loan to Grey Orange Incorporated, a
provider of warehouse management and order fulfillment
solutions;
- $0.9 million S + 6.00% first lien term loan and $2.1 million
unfunded delayed draw term loan to Peter C. Foy & Associates
Insurance Services, LLC (PCF Insurance), a national retail property
and casualty insurance broker; and
- $0.1 million funded revolver (with an additional $0.3 million
unfunded portion) and $7.3 million S + 6.00% unfunded first lien
delayed draw term loan to Wealth Enhancement Group, LLC, a provider
of comprehensive independent wealth management services to affluent
and high net worth clients. Incremental
Investment/Funding Primarily in the Following Existing Portfolio
Companies
- $5.9 million of S + 7.00% first lien term loan to AlphaSense,
Inc.;
- $5.8 million of S + 7.00% first lien term loan and $5.8 million
unfunded delayed draw term loan to Persado, Inc.;
- $3.5 million of S + 7.50% second lien term loan to Outcomes
Group Holdings, Inc.;
- $3.2 million S + 6.25% first lien term loan and $0.6 million
unfunded revolver to James Perse Enterprises, Inc.;
- $3.1 million S + 6.50% first lien delayed draw term loan
funding (with an additional $3.2 million remaining unfunded) and
$0.4 million unfunded revolver to Homerenew Buyer, Inc.; and
- $2.3 million S + 7.50% to BW Holding, Inc. (Brook &
Whittle), which includes $1.9 million of second lien term loan and
$0.4 million of delayed draw term loan funding.
- Sales, exits, and repayments were primarily concentrated in
four complete exits in portfolio company investments and two
partial paydowns:
- $6.7 million full repayment of first lien loans in Tempus, LLC
(Epic Staffing);
- $6.4 million repayment of first lien term loans in Rhode
Holdings, Inc. (Kaseya);
- $4.2 million partial repayment of unsecured term loan in GBFC,
a non-accrual investment;
- $3.0 million full repayment of first lien term loan in SEP
Vulcan Acquisition, Inc. (Tasktop);
- $2.6 million partial repayment of first lien term loan in MBS
Opco, LLC; and
- $1.0 million full repayment of first lien term loan in Puppet,
Inc.
- During the quarter ended June 30, 2022, there were no new
non-accrual investments. As of June 30, 2022, there were three
non-accrual investment positions, representing approximately 3.5%
and 12.3% of total debt and preferred stock investments, at fair
value and cost, respectively, as compared to three non-accrual
investment positions of approximately 4.5% and 14.1% of total debt
and preferred stock investments at fair value and cost,
respectively, as of March 31, 2022. The weighted average internal
investment rating of the portfolio at FMV at June 30, 2022 declined
slightly to 1.27 as compared to 1.25 at March 31, 2022 and improved
from 1.37 at June 30, 2021.
- During the quarter ended June 30, 2022, net unrealized losses
were $(9.7) million, primarily attributable to spread widening and
general market declines that occurred during the quarter. There
were no realized gains or losses during the quarter.
Liquidity and Capital Resources
- At June 30, 2022, we had $22.4 million in cash and cash
equivalents and $119.0 million of availability under our credit
facility, subject to leverage restrictions, resulting in
approximately $141.4 million of availability for deployment into
portfolio company investments including current unfunded
commitments. Committed but unfunded portfolio obligations at June
30, 2022 were $69.5 million, at par. We believe there is sufficient
liquidity to meet all of the Company’s obligations and deploy new
capital consistent with our strategy.
- Net leverage, adjusted for available cash, receivables for
investments sold, payables for investments purchased and
unamortized debt issuance costs, was 0.64x at quarter-end, and our
240% asset coverage ratio provided the Company with additional debt
capacity of $119.0 million under its asset coverage requirements,
subject to borrowing capacity and borrowing base restrictions.
Further, as of June 30, 2022, approximately 86% of our assets were
invested in qualifying assets, exceeding the 70% regulatory
requirement of a business development company.
- For the second quarter of 2022, the Company declared a cash
dividend of $0.10 per share, payable on October 6, 2022 to
stockholders of record at the close of business on September 15,
2022.
Conference Call
BlackRock Capital Investment Corporation will host a
webcast/teleconference at 10:00 a.m. (Eastern Time) on Thursday,
August 4, 2022, to discuss its second quarter 2022 financial
results. All interested parties are welcome to participate. You can
access the teleconference by dialing, from the United States, (800)
347-6311 or from outside the United States, +1 (786) 460-7166, 10
minutes before 10:00 a.m. and referencing the BlackRock Capital
Investment Corporation Conference Call (ID Number 6941737). A live,
listen-only webcast will also be available via the Investor
Relations section of www.blackrockbkcc.com. This teleconference can
also be accessed using Microsoft Edge, Google Chrome, or Firefox
via this link: BlackRock Capital Investment Corporation Second
Quarter 2022 Earnings Call. Once clicked-on, please enter your
information to be connected. Please note that the link becomes
active fifteen minutes prior to the scheduled start time.
Both the teleconference and webcast will be available for replay
by 1:00 p.m. on Thursday, August 4, 2022 and ending at 1:00 p.m. on
Thursday, August 18, 2022. To access the replay of the
teleconference, callers from the United States should dial (888)
203-1112 and callers from outside the United States should dial +1
(719) 457-0820 and enter the Conference ID Number 6941737. To
access the webcast, please visit the investor relations section of
www.blackrockbkcc.com.
Prior to the webcast/teleconference, an investor presentation
that complements the earnings conference call will be posted to
BlackRock Capital Investment Corporation’s website within the
Presentations section of the Investors page
(https://www.blackrockbkcc.com/investors/news-and-events/disclaimer).
About BlackRock Capital Investment Corporation
BlackRock Capital Investment Corporation is a business
development company that provides debt and equity capital to
middle-market companies.
The Company's investment objective is to generate both current
income and capital appreciation through debt and equity
investments. We invest primarily in middle-market companies in the
form of senior debt securities and loans, and our investment
portfolio may include junior secured and unsecured debt securities
and loans, each of which may include an equity component.
BlackRock Capital Investment
Corporation
Consolidated Statements of
Assets and Liabilities
June 30, 2022
December 31, 2021
Assets
(Unaudited)
Investments at fair value:
Non-controlled, non-affiliated investments
(cost of $540,873,730 and $520,501,274)
$534,465,028
$526,504,945
Non-controlled, affiliated investments
(cost of $4,921,145 and $5,027,616)
4,255,178
4,131,978
Controlled investments (cost of
$84,922,381 and $89,097,765)
18,674,073
21,927,071
Total investments at fair value (cost of
$630,717,256 and $614,626,655)
557,394,279
552,563,994
Cash and cash equivalents
22,357,869
12,750,121
Interest, dividends and fees
receivable
2,750,717
3,671,722
Deferred debt issuance costs
1,285,143
1,511,418
Due from broker
1,097,291
—
Receivable for investments sold
81,034
690,550
Prepaid expenses and other assets
378,496
788,469
Total assets
$585,344,829
$571,976,274
Liabilities
Debt (net of deferred issuance costs of
$1,030,354 and $425,272)
$236,969,646
$196,875,330
Distributions payable
7,363,184
7,392,972
Management fees payable
1,947,167
2,122,519
Income incentive fees payable
69,343
170,002
Accrued capital gains incentive fees
—
1,544,569
Interest and debt related payables
739,153
601,379
Payable for investments purchased
597,517
11,679,798
Accrued administrative expenses
299,262
384,225
Interest rate swap at fair value
198,694
—
Accrued expenses and other liabilities
1,716,216
1,553,507
Total liabilities
249,900,182
222,324,301
Net assets
Common stock, par value $.001 per share,
200,000,000 common shares authorized, 84,481,797 and 84,478,251
issued and 73,354,142 and 73,876,987 outstanding
84,482
84,478
Paid-in capital in excess of par
848,052,543
852,360,178
Distributable earnings (losses)
(442,176,304)
(434,303,297)
Treasury stock at cost, 11,127,655 and
10,601,264 shares held
(70,516,074)
(68,489,386)
Total net assets
335,444,647
349,651,973
Total liabilities and net assets
$585,344,829
$571,976,274
Net assets per share
$4.57
$4.73
BlackRock Capital Investment
Corporation
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2022
June 30, 2021
June 30, 2022
June 30, 2021
Investment income
Interest income (excluding PIK):
Non-controlled, non-affiliated
investments
$11,646,011
$9,210,827
$23,252,914
$17,260,077
Non-controlled, affiliated investments
—
—
—
11,867
Controlled investments
—
135,371
—
718,571
PIK interest income:
Non-controlled, non-affiliated
investments
126,140
815,710
249,158
1,596,389
Non-controlled, affiliated investments
116,572
117,985
232,468
237,014
Dividend income (excluding PIK):
Non-controlled, affiliated investments
—
—
—
71,500
Controlled investments
—
536,908
—
1,047,975
PIK dividend income:
Non-controlled, non-affiliated
investments
78,729
—
154,611
—
Other income:
Non-controlled, non-affiliated
investments
301,503
40,958
562,091
186,990
Total investment income
12,268,955
10,857,759
24,451,242
21,130,383
Operating expenses
Interest and other debt expenses
2,860,691
2,969,177
5,589,642
5,722,273
Management fees
1,947,167
1,775,684
4,007,031
3,575,450
Incentive fees on income
69,343
—
88,356
—
Incentive fees on capital gains(1)
(1,073,068)
—
(1,544,569)
—
Administrative expenses
299,262
314,886
664,769
637,001
Professional fees
207,489
254,834
510,346
666,993
Insurance expense
196,114
201,597
395,872
400,961
Director fees
153,125
153,125
306,250
306,250
Investment advisor expenses
25,819
87,500
51,638
175,000
Other operating expenses
462,797
258,232
766,596
613,514
Total expenses, before incentive fee
waiver
5,148,739
6,015,035
10,835,931
12,097,442
Incentive fee waiver
—
—
—
—
Total expenses, net of incentive fee
waiver
5,148,739
6,015,035
10,835,931
12,097,442
Net investment income(1)
7,120,216
4,842,724
13,615,311
9,032,941
Realized and unrealized gain (loss) on
investments, Interest rate swap and foreign currency:
Net realized gain (loss):
Non-controlled, non-affiliated
investments
—
6,773
825,913
(639,501)
Non-controlled, affiliated investments
—
—
—
(7,989,591)
Controlled investments
—
(8,749,931)
—
(11,040,074)
Net realized gain (loss)
—
(8,743,158)
825,913
(19,669,166)
Net change in unrealized appreciation
(depreciation):
Non-controlled, non-affiliated
investments
(9,875,353)
27,464,721
(12,412,374)
37,333,277
Non-controlled, affiliated investments
(352,787)
153,217
229,671
6,988,190
Controlled investments
766,458
8,689,595
922,387
14,826,843
Interest rate swap
(198,694)
—
(198,694)
—
Foreign currency translation
—
(381,379)
—
(285,360)
Net change in unrealized appreciation
(depreciation)
(9,660,376)
35,926,154
(11,459,010)
58,862,950
Net realized and unrealized gain
(loss)
(9,660,376)
27,182,996
(10,633,097)
39,193,784
Net increase (decrease) in net assets
resulting from operations
$(2,540,160)
$32,025,720
$2,982,214
$48,226,725
Net investment income per
share—basic(1)
$0.10
$0.07
$0.18
$0.12
Earnings (loss) per share—basic(1)
$(0.03)
$0.43
$0.04
$0.65
Weighted average shares
outstanding—basic
73,667,822
74,150,425
73,744,580
74,292,637
Net investment income per
share—diluted(1)(2)
$0.10
$0.07
$0.18
$0.12
Earnings (loss) per
share—diluted(1)(2)
$(0.03)
$0.38
$0.04
$0.58
Weighted average shares
outstanding—diluted
87,860,082
91,144,162
89,329,839
91,286,374
(1)
Net investment income and per share
amounts displayed above are net of the reversal for incentive fees
on capital gains which is reflected on a hypothetical liquidation
basis in accordance with GAAP for the three and six month periods
ended June 30, 2022. Refer to Supplemental Information section
below for further details and as adjusted figures that reflect that
there were no incentive fees on capital gains realized and payable
to the Advisor during such periods.
(2)
For the three and sixth month periods
ended June 30, 2022, the impact of the hypothetical conversion of
the 2022 Convertible Notes was antidilutive.
Supplemental Information
The Company reports its financial results on a generally
accepted accounting principles (“GAAP”) basis; however, management
believes that evaluating the Company’s ongoing operating results
may be enhanced if investors have additional non-GAAP basis
financial measures. Management reviews non-GAAP financial measures
to assess ongoing operations and, for the reasons described below,
considers them to be effective indicators, for both management and
investors, of the Company’s financial performance over time. The
Company’s management does not advocate that investors consider such
non-GAAP financial measures in isolation from, or as a substitute
for, financial information prepared in accordance with GAAP.
The Company records its liability for incentive fees based on
capital gains by performing a hypothetical liquidation basis
calculation at the end of each reporting period, as required by
GAAP, which assumes that all unrealized capital appreciation and
depreciation is realized as of the reporting date. It should be
noted that incentive fees based on capital gains (if any) are not
due and payable until the end of the annual measurement period, or
every June 30. The incremental incentive fees disclosed for a given
period are not necessarily indicative of actual full year results.
Changes in the economic environment, financial markets and other
parameters used in determining such estimates could cause actual
results to differ and such differences could be material. There can
be no assurance that unrealized capital appreciation and
depreciation will be realized in the future, or that any accrued
capital gains incentive fee will become payable. Incentive fee
amounts on capital gains actually paid by the Company will
specifically exclude consideration of unrealized capital
appreciation, consistent with requirements under the Investment
Advisers Act of 1940 and the Company’s investment management
agreement. For a more detailed description of the Company’s
incentive fees, please refer to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2021, on file with the
SEC.
Computations for the periods below are derived from the
Company's financial statements as follows:
Three Months Ended
Six Months Ended
June 30, 2022
June 30, 2021
June 30, 2022
June 30, 2021
GAAP Basis:
Net Investment Income
$7,120,216
$4,842,724
$13,615,311
$9,032,941
Net Investment Income per share
0.10
0.07
0.18
0.12
Addback: GAAP incentive fee (reversal)
based on capital gains
(1,073,068)
—
(1,544,569)
—
Addback: GAAP incentive fee based on
Income net of incentive fee waiver (if any)
69,343
—
88,356
—
Pre-Incentive Fee1:
Net Investment Income
$6,116,491
$4,842,724
$12,159,098
$9,032,941
Net Investment Income per share
0.08
0.07
0.16
0.12
Less: Incremental incentive fee based on
Income net of incentive fee waiver (if any)
(69,343)
—
(88,356)
—
As Adjusted2:
Net Investment Income
$6,047,148
$4,842,724
$12,070,742
$9,032,941
Net Investment Income per share
0.08
0.07
0.16
0.12
1 Pre-Incentive Fee: Amounts are
adjusted to remove all incentive fees. Such fees have been accrued
(reversed) but are not due and payable at the reporting date.
2 As Adjusted: Amounts are adjusted
to remove the GAAP accrual (reversal) for incentive fee based on
capital gains, and to include only the incremental incentive fee
based on income. Adjusted amounts reflect the fact that no
incentive fee on capital gains was realized and payable to the
Advisor during the three and six month periods ended June 30, 2022
and 2021, respectively. Under the Current Management Agreement,
incentive fee based on income is calculated for each calendar
quarter and may be paid on a quarterly basis if certain thresholds
are met. Amounts reflected the Company’s ongoing operating results
and reflect the Company’s financial performance over time.
Forward-looking statements
This press release, and other statements that BlackRock Capital
Investment Corporation may make, may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act, with respect to BlackRock Capital Investment
Corporation’s future financial or business performance, strategies
or expectations. Forward-looking statements are typically
identified by words or phrases such as “trend,” “potential,”
“opportunity,” “pipeline,” “believe,” “comfortable,” “expect,”
“anticipate,” “current,” “intention,” “estimate,” “position,”
“assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,”
“seek,” “achieve,” and similar expressions, or future or
conditional verbs such as “will,” “would,” “should,” “could,” “may”
or similar expressions.
BlackRock Capital Investment Corporation cautions that
forward-looking statements are subject to numerous assumptions,
risks and uncertainties, which may change over time.
Forward-looking statements speak only as of the date they are made,
and BlackRock Capital Investment Corporation assumes no duty to and
does not undertake to update forward-looking statements. Actual
results could differ materially from those anticipated in
forward-looking statements and future results could differ
materially from historical performance.
In addition to factors previously disclosed in BlackRock Capital
Investment Corporation’s SEC reports and those identified elsewhere
in this press release, the following factors, among others, could
cause actual results to differ materially from forward-looking
statements or historical performance: (1) our future operating
results; (2) our business prospects and the prospects of our
portfolio companies; (3) the impact of investments that we expect
to make; (4) our contractual arrangements and relationships with
third parties; (5) the dependence of our future success on the
general economy and its impact on the industries in which we
invest; (6) the financial condition of and ability of our current
and prospective portfolio companies to achieve their objectives;
(7) our expected financings and investments; (8) the adequacy of
our cash resources and working capital, including our ability to
obtain continued financing on favorable terms; (9) the timing of
cash flows, if any, from the operations of our portfolio companies;
(10) the impact of increased competition; (11) the ability of our
investment advisor to locate suitable investments for us and to
monitor and administer our investments; (12) potential conflicts of
interest in the allocation of opportunities between us and other
investment funds managed by our investment advisor or its
affiliates; (13) the ability of our investment advisor to attract
and retain highly talented professionals; (14) changes in law and
policy accompanying the new administration and uncertainty pending
any such changes; (15) increased geopolitical unrest, terrorist
attacks or acts of war, which may adversely affect the general
economy, domestic and local financial and capital markets, or the
specific industries of our portfolio companies; (16) changes and
volatility in political, economic or industry conditions, the
interest rate environment, inflation, foreign exchange rates or
financial and capital markets; (17) the unfavorable resolution of
legal proceedings; and (18) the impact of changes to tax
legislation and, generally, our tax position.
BlackRock Capital Investment Corporation’s Annual Report on Form
10-K for the year ended December 31, 2021, filed with the SEC on
March 2, 2022, identifies additional factors that can affect
forward-looking statements.
Available Information
BlackRock Capital Investment Corporation’s filings with the SEC,
press releases, earnings releases and other financial information
are available on its website at www.blackrockbkcc.com. The
information contained on our website is not a part of this press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005789/en/
Investor Contact: Nik Singhal 212.810.5427
Press Contact: Brian Beades 212.810.5596
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