- Both GAAP Net Investment Income (“GAAP NII”) and Adjusted Net
Investment Income1 (“Adjusted NII”) were $7.7 million, or $0.10 per
share for the third quarter, an increase of 8% and 27% from the
prior quarter, respectively, providing third quarter dividend
coverage of 105%, up from 97% and 82% of GAAP dividend coverage and
adjusted dividend coverage, respectively, in the prior quarter.
This compares to GAAP NII and Adjusted NII of $7.1 million and $6.0
million in the prior quarter, respectively. GAAP NII and Adjusted
NII for the third quarter include fee and other one-time income of
approximately $0.02 per share.
- Net Asset Value (“NAV”) decreased to $332.0 million as of
September 30, 2022, down 1.0% from $335.4 million as of June 30,
2022; NAV per share decreased slightly to $4.56 per share from
$4.57 per share as of June 30, 2022.
- The Company had strong gross deployments totaling $78.0 million
during the third quarter, substantially all of which were in senior
secured debt. During the third quarter, 16 new portfolio companies
were added, bringing total portfolio companies at quarter-end to
111, up from 86 at the end of 2021 and 55 at the end of 2020. Gross
repayments during the third quarter were $60.8 million, including
full repayments from 5 existing portfolio companies.
- The Company’s weighted-average portfolio yield as of September
30, 2022 increased to 10.5% based on total portfolio fair value, up
from 9.1% as of June 30, 2022. The increase was largely driven by a
rise in LIBOR and SOFR rates during the quarter.
- Net leverage was 0.71x as of September 30, 2022, up from 0.64x
as of June 30, 2022, primarily driven by net deployments during the
third quarter. Total available liquidity, including cash, for
deployment into portfolio company investments was approximately
$124.9 million, subject to leverage and borrowing base
restrictions.
- Under the existing share repurchase program, 463,911 shares
were repurchased during the third quarter for approximately $1.7
million at an average price of $3.68 per share, including brokerage
commissions.
BlackRock Capital Investment Corporation (NASDAQ:BKCC) (“BCIC”
or the “Company,” “we,” “us” or “our”) announced today that its
Board of Directors declared a quarterly dividend of $0.10 per
share, payable on January 6, 2023 to stockholders of record at the
close of business on December 16, 2022.
______________________________________ 1Adjusted NII excludes
the “hypothetical liquidation” basis capital gains incentive fee
accrual (reversal) required under GAAP of zero and $(1.1) million
for the third quarter and second quarter of 2022, respectively
(refer to Supplemental Information for further details).
“We sustained our solid earnings momentum this quarter,
demonstrating the strength of our increasingly diversified
portfolio and our commitment to delivering solid risk-adjusted
returns,” said James E. Keenan, Chairman and Interim CEO of the
Company. “We are very pleased to announce that our NII exceeded our
$0.10 dividend by 5% this quarter. Higher LIBOR and SOFR rates, an
improved pricing environment on new originations, as well as strong
fee income during the third quarter contributed to a 27% increase
in adjusted quarterly NII. Our relatively modest leverage ratio of
0.71x allows us the flexibility to grow our portfolio and further
increase its earnings power.
“Drawing upon the power of the BlackRock platform, we added 16
new portfolio companies during the quarter, substantially all of
which were in senior secured debt. We have constructed a
well-diversified portfolio with 111 portfolio companies as of the
end of the quarter, representing significant progress from 47
portfolio companies at the end of 2019. We deployed $78 million in
the third quarter on a gross basis – almost entirely in first lien
loans. At the end of the quarter, 77% of our portfolio consisted of
first lien investments, up from 74% at the end of 2021 and 34% at
the end of 2019. Additionally, we reduced our non-core portfolio to
less than 2% of our entire portfolio. This was driven by
realization at par of our debt investment in MBS Opco, LLC ($12.2
million of proceeds including a $0.5 million distribution from our
residual equity position in MBS Parent, LLC), previously our
largest remaining non-core investment. We also fully exited our
debt investments in Juul, Metricstream, Dude Solutions and Power
Home. In each of these, we realized principal at par with an
aggregate realized IRR of 11.6% across these names,” Mr. Keenan
continued.
“Amidst the macroeconomic backdrop of high inflation, rising
interest rates, supply chain constraints and softening consumer
demand, we remain highly selective in underwriting new investments
and vigilant in monitoring our existing portfolio. We believe that
our portfolio is well positioned to withstand the impacts of an
economic downcycle. During the third quarter, there were no new
non-accrual investments.” Mr. Keenan concluded.
September 30, 2022
December 31, 2021
December 31, 2020
December 31, 2019
Portfolio Composition
First Lien Debt
77%
74%
50%
34%
Second Lien Debt
17%
19%
27%
23%
Junior Capital1
6%
7%
23%
43%
Portfolio Company Count
111
86
55
47
Non-Core
Assets
Portfolio Company Count2
4
5
6
9
Fair Market Value ("FMV", in Millions)
11
26
42
120
% of investments, at FMV
2%
5%
9%
16%
_______________________________________________ 1. Includes
unsecured/subordinated debt and equity investments. 2. Excludes
portfolio companies with zero FMV.
Financial Highlights
Q3 2022
Q2 2022
Q3 2021
($'s in millions, except per share
data)2
Total Amount
Per Share
Total Amount
Per Share
Total Amount
Per Share
Net Investment Income/(loss)
$7.7
$0.10
$7.1
$0.10
$4.9
$0.07
Net realized and unrealized
gains/(losses)
$(2.1)
$(0.03)
$(9.7)
$(0.13)
$6.7
$0.09
Basic earnings/(losses)
$5.6
$0.08
$(2.5)
$(0.03)
$11.6
$0.16
Dividends declared
$7.3
$0.10
$7.4
$0.10
$7.4
$0.10
Net Investment Income/(loss), as
adjusted2
$7.7
$0.10
$6.0
$0.08
$6.2
$0.08
Basic earnings/(losses), as adjusted1
$5.6
$0.08
$(3.6)
$(0.05)
$12.9
$0.17
________________________________________________ 1. Non-GAAP
basis financial measure, excluding the hypothetical liquidation
basis capital gain incentive fee accrual (reversal), if any, under
GAAP. See Supplemental Information. 2. Totals may not foot due to
rounding.
($'s in millions, except per share
data)
September 30, 2022
June 30, 2022
December 31, 2021
September 30, 2021
Total assets
$612.0
$585.3
$572.0
$575.9
Investment portfolio, at FMV
$574.6
$557.4
$552.6
$558.1
Debt outstanding
$260.9
$237.0
$196.9
$201.4
Total net assets
$332.0
$335.4
$349.7
$350.9
Net asset value per share
$4.56
$4.57
$4.73
$4.74
Net leverage ratio1
0.71x
0.64x
0.56x
0.57x
_______________________________________________ 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
- Reduced Exposure in Non-core Legacy
Portfolio: During the third quarter, the Company
received total proceeds of $12.2 million from our debt and equity
investments in MBS Opco, LLC and MBS Parent, LLC, which was
comprised of the full exit of our $11.7 million debt position at
par and a $0.5 million distribution from our equity position for
which we still hold a residual position. The non-core portfolio
stood at less than 2%, at fair value, of our entire portfolio as of
September 30, 2022.
- Other Junior Capital
Exposure: As of September 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.
- Share Repurchase Program:
During the third quarter, 463,911 shares were repurchased for $1.7
million at an average price of $3.68 per share, including brokerage
commissions. On November 2, 2022, authorization to repurchase the
remaining 6,598,268 shares expired. On October 28, 2022, the
Company’s Board of Directors authorized the Company to purchase up
to a total of 8,000,000 shares, commencing on November 7, 2022 and
effective until the earlier of November 6, 2023 or such time that
all of the authorized shares have been repurchased, subject to the
terms of a share repurchase program, if in effect.
Third Quarter Financial Updates
- Both GAAP NII and Adjusted NII were $7.7 million, or
approximately $0.10 per share, for the three months ended September
30, 2022, an increase of 8% and 27% from the prior quarter,
respectively. The increase in NII was driven partially by $1.3
million in fee and other one-time income received during the
quarter on portfolio company repayments, as compared to $0.4
million in the prior quarter. Relative to our dividend declared of
$0.10 per share, GAAP NII dividend coverage was 105%, up from 97%
from the prior quarter. Adjusted NII dividend coverage was also
105% for the third quarter, up from 82% in the prior quarter.
- NAV decreased to $332.0 million at September 30, 2022, down
1.0% from $335.4 million at June 30, 2022; NAV per share decreased
to $4.56 per share from $4.57 per share as of June 30, 2022. The
NAV decrease was driven by $2.4 million of net unrealized losses
across the investment portfolio and our interest rate swap
position, partially offset by $0.4 million of gains realized during
the quarter.
- For the quarter ended September 30, 2022, we incurred
management fees of $2.1 million, and incentive fees based on income
of $1.6 million. As of September 30, 2022, there was a total of
$1.7 million of incentive fees based on income accrued, but for
which payment to the investment advisor has been deferred pursuant
to our investment management agreement.
- For the quarter ended September 30, 2022, no capital gains
incentive fee was accrued (refer to Supplemental Information below
for further details) and at September 30, 2022, the balance of
accrued incentive fees on capital gains was zero.
Portfolio and Investment Activity*
Three Months Ended
($’s in millions)
September 30, 2022
June 30, 2022
September 30, 2021
Investment deployments
$78.0
$73.5
$62.8
Investment exits
$60.8
$25.1
$61.6
Number of portfolio company investments at
the end of period
111
100
78
Weighted average yield of debt and income
producing equity securities, at FMV
10.6%
9.3%
8.4%
% of Portfolio invested in Secured debt,
at FMV
94%
94%
88%
% of Portfolio invested in
Unsecured/subordinated debt, at FMV
4%
4%
5%
% of Portfolio invested in Equity, at
FMV
2%
2%
7%
Average investment by portfolio company,
at amortized cost
$5.8
$6.3
$8.2
*Balance sheet amounts and yield information above are as of
period end.
- We deployed $78.0 million during the quarter while exits and
repayments totaled $60.8 million, resulting in a $17.2 million net
increase in our portfolio.
- Deployments consisted of 16 new portfolio companies and 7
investments/fundings into existing portfolio companies, which are
outlined as follows: New Portfolio
Companies
- $11.1 million SOFR ("S") + 6.75% first lien term loan, $2.9
million unfunded delayed draw term loan ("DDTL"), and $1.1 million
unfunded revolver to ICIMS, Inc., a cloud-based human resources and
recruiting software company;
- $7.1 million S + 6.75% first lien term loan and $2.0 million
unfunded DDTL to GC Champion Acquisition LLC (Numerix), a software
provider for valuation and risk management of derivatives and
structured products;
- $7.0 million S + 8.00% first lien term loan to Jobvite, Inc.
(Employ, Inc.), a provider for talent acquisition software and
outsourced recruiting services;
- $5.4 million S + 6.25% first lien term loan, $1.1 million
unfunded DDTL, and $0.5 million unfunded revolver to Accordion
Partners, LLC, a private equity focused financial consulting and
technology firm;
- $5.2 million S + 9.00% first lien term loan and $1.7 million
unfunded DDTL to Freedom Financial Network Funding, LLC, a personal
finance company;
- $4.1 million S + 5.75% first lien term loan, $1.0 million
unfunded DDTL, and $0.5 million unfunded revolver to AmeriLife
Holdings, LLC, a provider of life and health insurance, annuities,
and retirement planning solutions;
- $4.1 million S + 6.25% first lien term loan and $0.3 million
unfunded revolver to Sailpoint Technologies Holdings, Inc., an
enterprise identity security solutions provider;
- $3.8 million S + 7.25% first lien term loan to Spartan Bidco
Pty Ltd (StarRez), a residential accommodation software
provider;
- $3.2 million S + 6.25% first lien term loan and $0.3 million
unfunded revolver to Fusion Holding Corp. (Finalsite), a provider
of digital communication and software solutions for K-12
schools;
- $1.9 million S + 7.50% first lien term loan to Anaconda, Inc.,
an open source package manager for programming languages;
- $1.9 million S + 6.88% first lien term loan, $1.5 million
unfunded DDTL, and $0.3 million unfunded revolver to GTY Technology
Holdings, Inc., a provider of vertical SaaS/cloud solutions for the
public sector;
- $1.9 million S + 7.00% first lien term loan to Gympass US, LLC,
a business-to-business wellness platform;
- $1.4 million S + 6.00% first lien term loan, $0.9 million
unfunded DDTL, and $0.2 million unfunded revolver to Pueblo
Mechanical and Controls, LLC, a commercial HVAC, plumbing, and
controls operator;
- $0.4 million S + 6.75% first lien term loan and $0.1 million
unfunded DDTL to Streamland Media MidCo LLC, a post-production
services company for TV, feature films and other media;
- $0.4 million S + 6.50% first lien term loan to Fusion Risk
Management, Inc., a provider for business continuity and risk
management software solutions; and
- $0.3 million S + 6.50% first lien term loan to Opco Borrower,
LLC (Giving Home Health Care), a provider of home health, home aid
and skilled nursing services. Incremental
Investment /Funding Primarily in the Following Existing Portfolio
Companies
- $6.8 million S + 6.50% first lien term loan to Syntellis
Parent, LLC (Axiom Software);
- $4.7 million S + 7.00% first lien DDTL funding to SumUp
Holdings Luxembourg S.A.R.L.;
- $3.5 million LIBOR + 5.50% first lien term loan to Calceus
Acquisition, Inc. (Cole Haan);
- $1.7 million S + 6.50% to Homerenew Buyer, Inc. (Project
Dream), including $1.6 million of first lien DDTL funding and $0.1
million of first lien revolver funding;
- $1.6 million S + 6.00% first lien DDTL funding to Peter C. Foy
& Associates Insurance Services, LLC (PCF Insurance);
- $0.7 million to Alpine Acquisition Corp II (48Forty), including
$0.3 million of first lien DDTL funding (S + 5.50%) and $0.4
million of first lien revolver funding (PRIME + 4.50%); and
- $0.6 million S + 6.00% first lien DDTL funding to Wealth
Enhancement Group, LLC.
- Sales, exits, and repayments were primarily concentrated in
five complete exits of portfolio company investments, and the full
debt repayment/equity distribution from our largest remaining
non-core legacy portfolio company, with a total of $1.3 million in
fee and other one-time income generated in excess of principal
repaid on these transactions:
- $13.0 million full repayment of first lien term loan in Juul
Labs, Inc. at par;
- $12.5 million full repayment of first lien term loans in
Metricstream, Inc. at par;
- Total proceeds of $12.2 million from our non-core debt and
equity investments in MBS, which was comprised of the full exit of
our $11.7 million debt position at par and a $0.5 million
distribution from our equity position for which we still hold a
residual value;
- $9.9 million full repayment at par of Dude Solutions Holdings,
Inc., including $9.2 million of first lien term loan and $0.7
million of revolver;
- $9.0 million full repayment of second lien term loans in
AmeriLife Holdings, LLC at par; and
- $2.5 million full repayment of first lien term loan in PHRG
Intermediate LLC at par.
- During the quarter ended September 30, 2022, there were no new
non-accrual investments. As of September 30, 2022, there were three
non-accrual investment positions, representing approximately 3.4%
and 11.9% of total debt and preferred stock investments, at fair
value and cost, respectively.
- The weighted average internal investment rating of the
portfolio at FMV at September 30, 2022 declined slightly to 1.28 as
compared to 1.27 at June 30, 2022 and improved from 1.33 at
September 30, 2021.
- During the quarter ended September 30, 2022, net realized and
unrealized losses were $(2.1) million, primarily attributable to
general market declines on our existing portfolio, the reversal of
unrealized gains and losses previously recorded due to portfolio
company exits and unrealized losses on our interest rate swap,
partially offset by $0.4 million of gains realized during the
quarter.
Liquidity and Capital Resources
- At September 30, 2022, we had $29.9 million in cash and cash
equivalents and $95.0 million of availability under our credit
facility, subject to leverage restrictions, resulting in
approximately $124.9 million of availability for deployment into
portfolio company investments including current unfunded
commitments, and for general use in the normal course of business.
Committed but unfunded portfolio obligations at September 30, 2022
were $70.9 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 0.71x at quarter-end, and our
226% asset coverage ratio provided the Company with additional debt
capacity of $95.0 million under its asset coverage requirements,
subject to borrowing capacity and borrowing base restrictions.
Further, as of September 30, 2022, approximately 85% of our assets
were invested in qualifying assets, exceeding the 70% requirement
for a business development company under Section 55(a) of the
Investment Company Act of 1940.
- For the third quarter of 2022, the Company declared a cash
dividend of $0.10 per share, payable on January 6, 2023 to
stockholders of record at the close of business on December 16,
2022.
Conference Call
BlackRock Capital Investment Corporation will host a
webcast/teleconference at 10:00 a.m. (Eastern Time) on Friday,
November 4, 2022, to discuss its third quarter 2022 financial
results. All interested parties are welcome to participate. You can
access the teleconference by dialing, from the United States, (877)
502-9276 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 8305226). 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 Third
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.
The teleconference and the webcast will be available for replay
by 3:00 p.m. on Friday, November 4, 2022 and ending at 3:00 p.m. on
Friday, November 18, 2022. The replay of the teleconference can be
accessed via the following link: BlackRock Capital Investment
Corporation Third Quarter 2022 Earnings Call Replay. 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
Formed in 2005, 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
September 30, 2022
December 31, 2021
Assets
(Unaudited)
Investments at fair value:
Non-controlled, non-affiliated investments
(cost of $559,525,663 and $520,501,274)
$551,835,929
$526,504,945
Non-controlled, affiliated investments
(cost of $4,866,587 and $5,027,616)
4,303,205
4,131,978
Controlled investments (cost of
$84,922,381 and $89,097,765)
18,442,000
21,927,071
Total investments at fair value (cost of
$649,314,631 and $614,626,655)
574,581,134
552,563,994
Cash and cash equivalents
29,859,866
12,750,121
Interest, dividends and fees
receivable
3,327,314
3,671,722
Due from broker
1,878,136
—
Deferred debt issuance costs
1,170,130
1,511,418
Receivable for investments sold
415,514
690,550
Prepaid expenses and other assets
722,184
788,469
Total assets
$611,954,278
$571,976,274
Liabilities
Debt (net of deferred issuance costs of
$1,050,269 and $425,272)
$260,949,731
$196,875,330
Dividends payable
7,312,237
7,392,972
Payable for investments purchased
3,532,831
11,679,798
Management fees payable
2,118,115
2,122,519
Income incentive fees payable
1,690,745
170,002
Accrued capital gains incentive fees
—
1,544,569
Interest and debt related payables
1,315,162
601,379
Interest Rate Swap at fair value
1,214,658
—
Accrued administrative expenses
345,707
384,225
Accrued expenses and other liabilities
1,441,349
1,553,507
Total liabilities
279,920,535
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 72,890,231 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)
(443,881,330)
(434,303,297)
Treasury stock at cost, 11,591,566 and
10,601,264 shares held
(72,221,952)
(68,489,386)
Total net assets
332,033,743
349,651,973
Total liabilities and net assets
$611,954,278
$571,976,274
Net assets per share
$4.56
$4.73
BlackRock Capital Investment Corporation
Consolidated Statements of Operations (Unaudited)
Three Months Ended
Nine Months Ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Investment income
Interest income (excluding PIK):
Non-controlled, non-affiliated
investments
$14,733,808
$11,247,240
$37,986,722
$28,507,317
Non-controlled, affiliated investments
—
—
—
11,867
Controlled investments
—
—
—
718,571
PIK interest income:
Non-controlled, non-affiliated
investments
376,854
436,929
626,012
2,033,318
Non-controlled, affiliated investments
114,909
123,521
347,377
360,535
Dividend income (excluding PIK):
Non-controlled, affiliated investments
—
—
—
71,500
Controlled investments
—
483,038
—
1,531,013
PIK dividend income:
Non-controlled, non-affiliated
investments
81,188
—
235,799
—
Other income:
Non-controlled, non-affiliated
investments
718,634
223,598
1,280,725
410,588
Total investment income
16,025,393
12,514,326
40,476,635
33,644,709
Operating expenses
Interest and other debt expenses
3,337,735
2,973,408
8,927,377
8,695,681
Management fees
2,118,115
2,086,219
6,125,146
5,661,669
Incentive fees on income
1,621,402
79,383
1,709,758
79,383
Incentive fees on capital gains(1)
—
1,291,952
(1,544,569)
1,291,952
Administrative expenses
345,707
333,057
1,010,476
970,058
Professional fees
214,022
301,976
724,368
968,969
Insurance expense
187,022
204,197
582,894
605,158
Director fees
149,375
158,125
455,625
464,375
Investment advisor expenses
25,819
87,500
77,457
262,500
Other operating expenses
363,161
167,737
1,129,757
781,251
Total expenses, before incentive fee
waiver
8,362,358
7,683,554
19,198,289
19,780,996
Incentive fee waiver
—
(79,383)
—
(79,383)
Total expenses, net of incentive fee
waiver
8,362,358
7,604,171
19,198,289
19,701,613
Net investment income(1)
7,663,035
4,910,155
21,278,346
13,943,096
Realized and unrealized gain (loss) on
investments, Interest Rate Swap and foreign currency:
Net realized gain (loss):
Non-controlled, non-affiliated
investments
370,660
22,048,077
1,196,573
21,408,576
Non-controlled, affiliated investments
—
—
—
(7,989,591)
Controlled investments
—
524,445
—
(10,515,629)
Net realized gain (loss)
370,660
22,572,522
1,196,573
2,903,356
Net change in unrealized appreciation
(depreciation):
Non-controlled, non-affiliated
investments
(1,281,032)
(17,434,641)
(13,693,406)
19,898,636
Non-controlled, affiliated investments
102,585
31,709
332,256
7,019,899
Controlled investments
(232,073)
1,522,554
690,314
16,349,397
Interest Rate Swap
(1,015,964)
—
(1,214,658)
—
Foreign currency translation
—
—
—
(285,360)
Net change in unrealized appreciation
(depreciation)
(2,426,484)
(15,880,378)
(13,885,494)
42,982,572
Net realized and unrealized gain
(loss)
(2,055,824)
6,692,144
(12,688,921)
45,885,928
Net increase (decrease) in net assets
resulting from operations
$5,607,211
$11,602,299
$8,589,425
$59,829,024
Net investment income per
share—basic(1)
$0.10
$0.07
$0.29
$0.19
Earnings (loss) per share—basic(1)
$0.08
$0.16
$0.12
$0.81
Weighted average shares
outstanding—basic
73,170,323
74,081,693
73,551,057
74,221,550
Net investment income per
share—diluted(1)(2)
$0.10
$0.07
$0.29
$0.19
Earnings (loss) per
share—diluted(1)(2)
$0.08
$0.15
$0.12
$0.73
Weighted average shares
outstanding—diluted
73,170,323
91,075,430
83,884,141
91,215,287
(1)
Net investment income and per share amounts displayed above are
net of the accrual (reversal) for incentive fees on capital gains
which is reflected on a hypothetical liquidation basis in
accordance with GAAP for the nine month period ended September 30,
2022 and for the three and nine month periods ended September 30,
2021. 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 nine month period ended September 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 (if any) 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,
geopolitical conditions and other parameters could cause actual
results to differ from estimates 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
Securities and Exchange Commission ("SEC").
Computations for the periods below are derived from the
Company's financial statements as follows:
Three Months Ended
Nine Months Ended
September 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
GAAP Basis:
Net Investment Income
$7,663,035
$4,910,155
$21,278,346
$13,943,096
Net Investment Income per share
0.10
0.07
0.29
0.19
Addback: GAAP incentive fee (reversal)
based on capital gains
—
1,291,952
(1,544,569)
1,291,952
Addback: GAAP incentive fee based on
Income net of incentive fee waiver (if any)
1,621,402
—
1,709,758
—
Pre-Incentive Fee1:
Net Investment Income
$9,284,437
$6,202,107
$21,443,535
$15,235,048
Net Investment Income per share
0.13
0.08
0.29
0.21
Less: Incremental incentive fee based on
Income net of incentive fee waiver (if any)
(1,621,402)
—
(1,709,758)
—
As Adjusted2:
Net Investment Income
$7,663,035
$6,202,107
$19,733,777
$15,235,048
Net Investment Income per share
0.10
0.08
0.27
0.21
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 (if any) 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 nine month
periods ended September 30, 2022 and 2021, respectively. Under the
current investment 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.
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, credit risk, 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/20221103006013/en/
Investors: Nik Singhal 212.810.5427
Press: Brian Beades 212.810.5596
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