HOUSTON,
Texas, May 9, 2023 /PRNewswire/ -- Stellus
Capital Investment Corporation (NYSE:SCM) ("Stellus" or the
"Company") today announced financial results for its first fiscal
quarter ended March 31, 2023.
Robert T. Ladd, Chief Executive
Officer of Stellus, stated, "I am pleased to report strong results
for the quarter ended March 31, 2023,
in which both U.S. GAAP net investment income of $0.46 per share and Non-U.S. GAAP
Core net investment income of $0.45
per share, which excludes the impact of capital gains
incentive fees and income taxes, the majority of which are excise
taxes, covered the regular dividend of $0.40 per share. Our portfolio grew by
$33 million to $878 million at fair value and the loan portfolio
was yielding 11.4%, on average at March 31,
2023."
|
FINANCIAL
HIGHLIGHTS
($ in millions, except
data relating to per share amounts and shares
outstanding)
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31, 2023
|
|
March 31, 2022
|
|
Amount
|
Per
Share
|
|
Amount
|
Per
Share
|
|
Net investment
income
|
$9.07
|
$0.46
|
|
$5.51
|
$0.28
|
|
Core net investment
income(1)
|
8.87
|
0.45
|
|
5.75
|
0.29
|
|
Net realized gain on
investments
|
0.03
|
-
|
|
3.46
|
0.18
|
|
Net realized loss on
foreign currency translation
|
(0.04)
|
-
|
|
(0.01)
|
-
|
|
Total realized
income(2)
|
$9.06
|
$0.46
|
|
$8.96
|
$0.46
|
|
Distributions
|
(7.95)
|
(0.40)
|
|
(5.46)
|
(0.28)
|
|
Net unrealized
depreciation on investments
|
(4.25)
|
(0.22)
|
|
(3.72)
|
(0.19)
|
|
Provision for taxes on
unrealized appreciation on investments in taxable
subsidiaries
|
(0.08)
|
-
|
|
(0.02)
|
-
|
|
Net increase in net
assets resulting from operations
|
$4.74
|
0.24
|
|
$5.22
|
0.27
|
|
Weighted average shares
outstanding
|
|
19,779,988
|
|
|
19,517,761
|
|
|
|
(1)
|
Core net investment
income, as presented, excludes the impact of capital gains
incentive fees and income taxes, the majority of which are excise
taxes. The Company believes presenting core net investment income
and the related per share amount is a useful supplemental
disclosure for analyzing its financial performance. However, core
net investment income is a non-U.S. GAAP measure and should not be
considered as a replacement for net investment income and other
earnings measures presented in accordance with U.S. generally
accepted accounting principles ("U.S. GAAP"). A reconciliation of
net investment income in accordance with U.S. GAAP to core net
investment income is presented in the table below the financial
statements.
|
|
(2)
|
Total realized income
is the sum of net investment income, net realized gains (losses) on
investments, net realized gains (losses) on foreign currency, and
loss on debt extinguishment; all U.S. GAAP measures.
|
|
PORTFOLIO
ACTIVITY
($ in millions, except
data relating to per share amounts and number of portfolio
companies)
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Investments at fair
value
|
|
$877.5
|
|
$844.7
|
|
Total assets
|
|
$900.9
|
|
$898.2
|
|
Net assets
|
|
$280.9
|
|
$275.8
|
|
Shares
outstanding
|
|
20,248,383
|
|
19,666,769
|
|
Net asset value per
share
|
|
$13.87
|
|
$14.02
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31, 2023
|
|
March 31, 2022
|
|
New
investments
|
|
$41.2
|
|
$74.5
|
|
Repayments of
investments
|
|
(5.9)
|
|
(10.0)
|
|
Net activity
|
|
$35.3
|
|
$64.5
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Number of portfolio
company investments
|
|
88
|
|
85
|
|
Number of debt
investments
|
|
76
|
|
73
|
|
|
|
|
|
|
Weight average yield of
debt and other income producing
investments(3)
|
|
Cash
|
|
10.6 %
|
|
10.3 %
|
|
Payment-in-kind
("PIK")
|
|
0.4 %
|
|
0.4 %
|
|
Fee
amortization
|
|
0.4 %
|
|
0.4 %
|
|
Total
|
|
11.4 %
|
|
11.1 %
|
|
|
|
|
|
|
Weighted average yield
on total investments(4)
|
|
Cash
|
|
10.0 %
|
|
9.7 %
|
|
Payment-in-kind
("PIK")
|
|
0.4 %
|
|
0.3 %
|
|
Fee
amortization
|
|
0.4 %
|
|
0.4 %
|
|
Total
|
|
10.8 %
|
|
10.4 %
|
|
|
|
|
|
|
|
|
(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 of our common stock would realize in a
return over the same period because the dollar-weighted average
annualized yield does not reflect the Company's expense or any
sales load that may be paid by investors.
|
|
(4)
|
The dollar-weighted
average yield on total investments takes the same yields as
calculated in the footnote above, but weights them to determine the
weighted average effective yield as a percentage of the Company's
total investments, including non-income producing loans and
equity.
|
Results of Operations
Investment income for the three months ended March 31, 2023 and 2022 totaled $24.1 million and $15.5
million, respectively, most of which was interest income
from portfolio investments.
Operating expenses for the three months ended March 31, 2023 and 2022, totaled $15.0 million and $10.0
million, respectively. For the same respective periods, base
management fees totaled $3.7 million
and $3.5 million, income incentive
fees totaled $2.1 million and
$0.0 million, capital gains incentive
(reversal) fees totaled ($0.6)
million and ($0.0) million,
fees and expenses related to our borrowings totaled $7.9 million and $4.9
million (including interest and amortization of deferred
financing costs), administrative expenses totaled $0.5 million for both periods, income tax totaled
$0.4 million and $0.3 million and other expenses totaled
$1.0 million and $0.8 million.
The capital gains incentive fee had a reversal of ($0.6) million for the three months ended
March 31, 2023 due to the increase in
unrealized losses, net of realized gains over the quarter. Such
fees, as calculated and accrued, would not necessarily be payable
under the investment advisory agreement, and may never be paid
based upon the computation of incentive fees in subsequent periods.
The income tax expense accrual of $0.4
million for the three months ended March 31, 2023 was accrued based on estimates of
undistributed taxable income, which was generated largely from net
investment income.
Net investment income was $9.1
million and $5.5 million, or
$0.46 and $0.28 per common share based on weighted average
common shares outstanding of 19,779,988 and 19,517,761 for the
three months ended March 31, 2023 and
2022, respectively. Core net investment income, which is a non-U.S.
GAAP measure that excludes the capital gains incentive fee
(reversal) and income tax expense accruals, for the
three months ended March 31, 2023 and
2022 was $8.9 million and
$5.8 million, or $0.45 and $0.29 per
share, respectively.
For the three months ended March 31,
2023 and 2022, the Company's investment portfolio had a net
change in unrealized depreciation of ($4.2)
million and ($3.7) million,
respectively, and the Company had realized gains of $0.0 million and $3.5
million, respectively.
Net increase in net assets resulting from operations totaled
$4.8 million and $5.2 million, or $0.24 and $0.27 per
common share, based on weighted average common shares outstanding
of 19,779,988 and 19,517,761 for the three months ended
March 31, 2023 and 2022,
respectively.
Liquidity and Capital Resources
As of March 31, 2023, our amended
and restated 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
$265.0 million on a committed basis.
As of March 31, 2023 and December 31, 2022, the Credit Facility had an
accordion feature which allowed for potential future expansion of
the facility size to $280.0 million.
As of March 31, 2023 and December 31, 2022, we had $198.3 million and $199.2
million in outstanding borrowings under the Credit Facility,
respectively.
The Company issued 581,614 shares during
the three months ended March 31,
2023 under the At-the-Market Program ("ATM Program"),
for gross proceeds of $8.4 million.
The average per share offering price of shares issued under the ATM
Program during the three months ended March
31, 2023 was $14.47. Stellus
Capital Management, LLC, the Company's investment adviser (the
"Advisor"), agreed to reimburse the Company for underwriting fees
to the extent the per share price of the shares to the public, less
underwriting fees, was less then net asset value per share. For the
three months ended March 31, 2023,
the Advisor reimbursed the Company $0.1
million, which resulted in net proceeds of $8.3 million, or $14.38 per share, excluding the impact of
offering expenses.
Distributions
During the three months ended March 31,
2023 and 2022, we declared aggregate distributions of
$0.40 and $0.28 per share, respectively ($8.0 million and $5.5
million, respectively). Tax characteristics of all
distributions will be reported to stockholders on Form 1099-DIV
after the end of the calendar year. None of these dividends are
expected to include a return of capital.
Recent Portfolio Activity
The Company invested in the following portfolio companies during
the three months ended March 31,
2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity
Type
|
|
Date
|
|
Company
Name
|
|
Company
Description
|
|
Investment
Amount
|
|
Instrument
Type
|
|
Add-On
Investment
|
|
January 5,
2023
|
|
Advanced Barrier
Extrusions, LLC*
|
|
Manufacturer of high
barrier forming web films
|
|
$
|
35,308
|
|
Equity
|
|
New
Investment
|
|
January 23,
2023
|
|
Evriholder Acquisition,
Inc.
|
|
Designer and supplier
of impulse products and merchandising
solutions to retailers
|
|
$
|
13,000,000
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
100,000
|
|
Revolver
commitment
|
|
|
|
|
|
|
|
|
$
|
873,333
|
|
Equity
|
|
New
Investment
|
|
January 31,
2023
|
|
Red's All Natural,
LLC
|
|
Premium frozen food
manufacturer
|
|
$
|
10,916,882
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
710,600
|
|
Equity
|
|
Add-On
Investment
|
|
March 1,
2023
|
|
Elliott Aviation,
LLC*
|
|
Provider of services to
the business aviation sector
|
|
$
|
500,000
|
|
Revolver
commitment
|
|
Add-On
Investment
|
|
March 6,
2023
|
|
Whisps Holdings
LP*
|
|
Importer of Italian
cheese in the U.S.
|
|
$
|
107,418
|
|
Equity
|
|
New
Investment
|
|
March 15,
2023
|
|
Cerebro Buyer,
LLC
|
|
Manufacturer of
single-use electrodes for medical procedures
|
|
$
|
4,682,323
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
100,000
|
|
Revolver
commitment
|
|
|
|
|
|
|
|
|
$
|
62,961
|
|
Equity
|
|
|
|
|
|
|
|
|
$
|
341,091
|
|
Equity
|
|
Add-On
Investment
|
|
March 27,
2023
|
|
BDS Solutions
Intermediateco, LLC*
|
|
Leading provider of
outsourced marketing services
|
|
$
|
1,702,782
|
|
Senior Secured – First
Lien
|
|
New
Investment
|
|
March 31,
2023
|
|
American Refrigeration,
LLC
|
|
Provider of industrial
refrigeration installation and maintenance
services
|
|
$
|
8,275,678
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
100,000
|
|
Revolver
commitment
|
|
|
|
|
|
|
|
|
$
|
100,000
|
|
Delayed Draw Term Loan
Commitment
|
|
* Existing portfolio
company
|
|
|
|
$
|
141,261
|
|
Equity
|
The Company realized investments in the following portfolio
companies during the three months ended March 31, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity
Type
|
|
Date
|
|
Company
Name
|
|
Proceeds
Received
|
|
Realized
Gain
|
|
Instrument
Type
|
|
Full
Repayment
|
|
March 29,
2023
|
|
AIP ATCO Buyer,
LLC
|
|
$
|
99,500
|
|
$
|
—
|
|
Senior Secured – First
Lien
|
Events Subsequent to March 31,
2023
The Company's management has evaluated subsequent events through
May 9, 2023. There have been no
subsequent events that require recognition or disclosure except for
the following described below.
Investment Portfolio
The Company invested in the following portfolio companies
subsequent to March 31, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity
Type
|
|
Date
|
|
Company
Name
|
|
Company
Description
|
|
Investment
Amount
|
|
Instrument
Type
|
|
Add-On
Investment
|
|
April 3,
2023
|
|
EH Real Estate
Services, LLC*
|
|
Offers residential
property brokerage, title & settlement,
and property and casualty insurance brokerage services to
home buyers and sellers
|
|
$
|
570,279
|
|
Senior Secured – First
Lien
|
|
Add-On
Investment
|
|
April 11,
2023
|
|
ADS Group Opco,
LLC*
|
|
Full-service
manufacturer for original equipment
manufacturers, prime contractors, and Tier I suppliers
across the defense, space, and aerospace industries
|
|
$
|
88,733
|
|
Equity
|
|
Add-On
Investment
|
|
April 13,
2023
|
|
Tower Arch Infolinks
Media, LP*
|
|
Advertising placement
partner for small to mid-sized
publishers
|
|
$
|
1,093
|
|
Equity
|
|
Add-On
Investment
|
|
April 14,
2023
|
|
BLP Buyer,
Inc.*
|
|
Distributor of lifting
solutions
|
|
$
|
1,729,958
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
229,010
|
|
Equity
|
|
Add-On
Investment
|
|
April 17,
2023
|
|
Axis Portable Air,
LLC*
|
|
Air conditioning,
heating, and air quality equipment
rental company
|
|
$
|
1,893,610
|
|
Senior Secured – First
Lien
|
|
Add-On
Investment
|
|
April 27,
2023
|
|
CompleteCase,
LLC*
|
|
Provider of online
uncontested divorce solutions
|
|
$
|
66,667
|
|
Revolver
commitment
|
|
|
|
|
|
|
|
|
$
|
111,408
|
|
Equity
|
|
New
Investment
|
|
April 28,
2023
|
|
Impact Home Services,
LLC
|
|
Residential, garage
door, electrical, and plumbing
services provider
|
|
$
|
5,936,899
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
100,000
|
|
Revolver
commitment
|
|
|
|
|
|
|
|
|
$
|
310,844
|
|
Equity
|
|
New
Investment
|
|
May 1, 2023
|
|
RIA Advisory,
LLC
|
|
Provider of Oracle
software implementation services
|
|
$
|
6,000,000
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
100,000
|
|
Revolver
commitment
|
|
* Existing portfolio
company
|
|
|
|
$
|
243,467
|
|
Equity
|
Credit Facility
The outstanding balance under the Credit Facility as of
May 9, 2023 was $200.4 million.
SBA-guaranteed Debentures
The total balance of SBA-guaranteed debentures outstanding as of
May 9, 2023 was $313.6 million.
ATM program
Since March 31, 2023, the Company issued 587,363 shares
under the ATM Program, for gross proceeds of $8.1 million and underwriting and other expenses
of $0.1 million. The average per
share offering price of shares issued in the ATM Program subsequent
to March 31, 2023 was $13.87. The Advisor agreed to reimburse the
Company for underwriting fees and expenses to the extent the
issuance of shares would be dilutive in nature. As such, the
Advisor reimbursed the Company $0.2
million which resulted in net proceeds of $8.2 million, or $14.02 per share.
Distributions Declared
On April 19, 2023, our Board of
Directors declared a regular monthly distribution for each of
April, May, and June 2023, as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Ex-Dividend
|
|
Record
|
|
Payment
|
|
Amount per
|
|
Declared
|
|
Date
|
|
Date
|
|
Date
|
|
Share
|
|
4/19/2023
|
|
4/28/2023
|
|
5/1/2023
|
|
5/15/2023
|
|
$
|
0.1333
|
|
4/19/2023
|
|
5/30/2023
|
|
5/31/2023
|
|
6/15/2023
|
|
$
|
0.1333
|
|
4/19/2023
|
|
6/29/2023
|
|
6/30/2023
|
|
7/14/2023
|
|
$
|
0.1333
|
Conference Call Information
Stellus Capital Investment Corporation will host a conference
call to discuss these results on Wednesday,
May 10, 2023 at 9:00 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 589075. Starting approximately two hours
after the conclusion of the call, a replay will be available
through Wednesday, May 24, 2023 by
dialing (877) 481-4010 and entering passcode 48362. The replay will
also be available on the Company's website.
For those wishing to participate via Live Webcast, connect via
the Public Company (SCIC) section of our website at
www.stelluscapital.com, under the Events tab. A replay of the
conference will be available on our website for approximately 90
days.
About Stellus Capital Investment Corporation
The Company is an externally-managed, closed-end,
non-diversified investment management company that has elected to
be regulated as a business development company under the Investment
Company Act of 1940, as amended. The Company's investment objective
is to maximize the total return to its stockholders in the form of
current income and capital appreciation by investing primarily in
private middle-market companies (typically those with $5.0 million to $50.0
million of EBITDA (earnings before interest, taxes,
depreciation and amortization)) through first lien (including
unitranche) loans, second lien loans and unsecured debt financing,
with corresponding equity co-investments. The Company's investment
activities are managed by its investment adviser, Stellus Capital
Management. To learn more about Stellus Capital Investment
Corporation, visit www.stelluscapital.com under the "Public (SCIC)"
tab.
Forward-Looking Statements
Statements included herein may contain "forward-looking
statements" which relate to future performance or financial
condition. Statements other than statements of historical facts
included in this press release may constitute forward-looking
statements and are not guarantees of future performance or results
and involve a number of assumptions, risks and uncertainties, which
change over time. Actual results may differ materially from those
anticipated in any forward-looking statements as a result of a
number of factors, including those described from time to time in
filings by the Company with the Securities and Exchange Commission
including the final prospectus that will be filed with the
Securities and Exchange Commission. The Company undertakes no duty
to update any forward-looking statement made herein. All
forward-looking statements speak only as of the date of this press
release.
Contacts
Stellus Capital Investment Corporation
W. Todd Huskinson, Chief Financial
Officer
(713) 292-5414
thuskinson@stelluscapital.com
|
STELLUS CAPITAL
INVESTMENT CORPORATION
CONSOLIDATED
STATEMENT OF ASSETS AND LIABILITIES (unaudited)
|
|
|
|
|
|
|
|
|
|
|
March 31, 2023
|
|
|
|
|
|
(unaudited)
|
|
December 31, 2022
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments, at fair value (amortized cost of
$912,581,782 and $875,823,177, respectively)
|
|
$
|
877,493,781
|
|
$
|
844,733,638
|
|
|
Cash and cash
equivalents
|
|
|
17,852,100
|
|
|
48,043,329
|
|
|
Receivable for sales
and repayments of investments
|
|
|
777,568
|
|
|
718,794
|
|
|
Interest
receivable
|
|
|
4,171,829
|
|
|
3,984,409
|
|
|
Other
receivables
|
|
|
34,245
|
|
|
34,245
|
|
|
Deferred offering
costs
|
|
|
3,800
|
|
|
1,100
|
|
|
Prepaid
expenses
|
|
|
518,853
|
|
|
667,267
|
|
|
Total
Assets
|
|
$
|
900,852,176
|
|
$
|
898,182,782
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
98,659,842
|
|
$
|
98,549,692
|
|
|
Credit Facility
payable
|
|
|
196,906,509
|
|
|
197,685,281
|
|
|
SBA-guaranteed
debentures
|
|
|
308,212,703
|
|
|
307,895,195
|
|
|
Dividends
payable
|
|
|
2,699,110
|
|
|
—
|
|
|
Management fees
payable
|
|
|
4,557,841
|
|
|
7,150,407
|
|
|
Income incentive fees
payable
|
|
|
4,589,243
|
|
|
2,464,408
|
|
|
Capital gains incentive
fees payable
|
|
|
—
|
|
|
569,528
|
|
|
Interest
payable
|
|
|
1,203,768
|
|
|
4,640,841
|
|
|
Related party
payable
|
|
|
413,928
|
|
|
1,060,321
|
|
|
Unearned
revenue
|
|
|
273,102
|
|
|
320,675
|
|
|
Administrative services
payable
|
|
|
396,870
|
|
|
356,919
|
|
|
Income tax
payable
|
|
|
1,549,833
|
|
|
1,175,373
|
|
|
Deferred tax
liability
|
|
|
140,696
|
|
|
61,936
|
|
|
Other accrued expenses
and liabilities
|
|
|
396,686
|
|
|
475,593
|
|
|
Total
Liabilities
|
|
$
|
620,000,131
|
|
$
|
622,406,169
|
|
|
Commitments and
contingencies (Note 7)
|
|
|
|
|
|
|
|
|
Net
Assets
|
|
$
|
280,852,045
|
|
$
|
275,776,613
|
|
|
NET
ASSETS
|
|
|
|
|
|
|
|
|
Common stock, par value
$0.001 per share (100,000,000 shares authorized;
20,248,383
and 19,666,769 issued and outstanding, respectively
|
|
$
|
20,248
|
|
$
|
19,667
|
|
|
Paid-in
capital
|
|
|
283,404,708
|
|
|
275,114,720
|
|
|
Total distributable
(loss) earnings
|
|
|
(2,572,911)
|
|
|
642,226
|
|
|
Net
Assets
|
|
$
|
280,852,045
|
|
$
|
275,776,613
|
|
|
Total Liabilities
and Net Assets
|
|
$
|
900,852,176
|
|
$
|
898,182,782
|
|
|
Net Asset Value Per
Share
|
|
$
|
13.87
|
|
$
|
14.02
|
|
|
STELLUS CAPITAL
INVESTMENT CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the
three
|
|
For the
three
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
March 31, 2023
|
|
March 31, 2022
|
|
|
INVESTMENT
INCOME
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
23,408,604
|
|
$
|
15,116,951
|
|
|
Other income
|
|
|
666,743
|
|
|
377,453
|
|
|
Total Investment
Income
|
|
$
|
24,075,347
|
|
$
|
15,494,404
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Management
fees
|
|
$
|
3,735,102
|
|
$
|
3,492,713
|
|
|
Valuation
fees
|
|
|
147,073
|
|
|
139,588
|
|
|
Administrative services
expenses
|
|
|
461,964
|
|
|
474,318
|
|
|
Income incentive
fees
|
|
|
2,124,835
|
|
|
—
|
|
|
Capital gains incentive
fee reversal
|
|
|
(569,528)
|
|
|
(42,217)
|
|
|
Professional
fees
|
|
|
430,848
|
|
|
312,062
|
|
|
Directors'
fees
|
|
|
117,250
|
|
|
96,500
|
|
|
Insurance
expense
|
|
|
120,546
|
|
|
124,507
|
|
|
Interest expense and
other fees
|
|
|
7,886,424
|
|
|
4,891,597
|
|
|
Income tax
expense
|
|
|
374,763
|
|
|
279,417
|
|
|
Other general and
administrative expenses
|
|
|
178,450
|
|
|
211,736
|
|
|
Total Operating
Expenses
|
|
$
|
15,007,727
|
|
$
|
9,980,221
|
|
|
Net Investment
Income
|
|
$
|
9,067,620
|
|
$
|
5,514,183
|
|
|
Net realized gain on
non-controlled, non-affiliated investments
|
|
$
|
34,967
|
|
$
|
3,458,090
|
|
|
Net realized loss on
foreign currency translation
|
|
|
(39,912)
|
|
|
(7,350)
|
|
|
Net change in
unrealized depreciation on non-controlled, non-affiliated
investments
|
|
|
(4,249,642)
|
|
|
(3,721,602)
|
|
|
Net change in
unrealized appreciation on foreign currency translation
|
|
|
1,874
|
|
|
—
|
|
|
Provision for taxes on
net unrealized appreciation on investments
|
|
|
(78,760)
|
|
|
(21,157)
|
|
|
Net Increase in Net
Assets Resulting from Operations
|
|
$
|
4,736,147
|
|
$
|
5,222,164
|
|
|
Net Investment
Income Per Share—basic and diluted
|
|
$
|
0.46
|
|
$
|
0.28
|
|
|
Net Increase in Net
Assets Resulting from Operations Per Share – basic and
diluted
|
|
$
|
0.24
|
|
$
|
0.27
|
|
|
Weighted Average
Shares of Common Stock Outstanding—basic and diluted
|
|
|
19,779,988
|
|
|
19,517,761
|
|
|
Distributions Per
Share—basic and diluted
|
|
$
|
0.40
|
|
$
|
0.28
|
|
|
STELLUS CAPITAL
INVESTMENT CORPORATION
CONSOLIDATED
STATEMENTS OF CHANGES IN NET
ASSETS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
Total
|
|
|
|
|
|
Number
|
|
Par
|
|
Paid-in
|
|
distributable
|
|
|
|
|
|
of shares
|
|
value
|
|
capital
|
|
earnings
(loss)
|
|
Net Assets
|
|
Balances at
December 31, 2021
|
|
19,517,595
|
|
$
|
19,518
|
|
$
|
274,559,121
|
|
$
|
10,532,594
|
|
$
|
285,111,233
|
|
Net investment
income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,514,183
|
|
|
5,514,183
|
|
Net realized gain on
non-controlled, non-affiliated investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,458,090
|
|
|
3,458,090
|
|
Net realized loss on
foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,350)
|
|
|
(7,350)
|
|
Net change in
unrealized depreciation on non-controlled, non-affiliated
investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,721,602)
|
|
|
(3,721,602)
|
|
Provision for taxes on
realized gain on investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,157)
|
|
|
(21,157)
|
|
Distributions from net
investment income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,464,666)
|
|
|
(5,464,666)
|
|
Issuance of common
stock, net of offering costs(1)
|
|
14,924
|
|
|
15
|
|
|
167,655
|
|
|
—
|
|
|
167,670
|
|
Balances at
March 31, 2022
|
|
19,532,519
|
|
$
|
19,533
|
|
$
|
274,726,776
|
|
$
|
10,290,092
|
|
$
|
285,036,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at
December 31, 2022
|
|
19,666,769
|
|
$
|
19,667
|
|
$
|
275,114,720
|
|
$
|
642,226
|
|
$
|
275,776,613
|
|
Net investment
income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,067,620
|
|
|
9,067,620
|
|
Net realized gain on
non-controlled, non-affiliated investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,967
|
|
|
34,967
|
|
Net realized loss on
foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,912)
|
|
|
(39,912)
|
|
Net change in
unrealized depreciation on non-controlled, non-affiliated
investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,249,642)
|
|
|
(4,249,642)
|
|
Net change in
unrealized appreciation on foreign currency translations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,874
|
|
|
1,874
|
|
Provision for taxes on
unrealized appreciation on investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78,760)
|
|
|
(78,760)
|
|
Distributions from net
investment income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,951,284)
|
|
|
(7,951,284)
|
|
Issuance of common
stock, net of offering costs(1)
|
|
581,614
|
|
|
581
|
|
|
8,289,988
|
|
|
—
|
|
|
8,290,569
|
|
Balances at
March 31, 2023
|
|
20,248,383
|
|
$
|
20,248
|
|
$
|
283,404,708
|
|
$
|
(2,572,911)
|
|
$
|
280,852,045
|
|
|
|
(1)
|
See Note 4 to the
Consolidated Financial Statements on Form 10-Q filed with the
Securities and Exchange Commission on May 9, 2023 for more
information on offering costs.
|
|
STELLUS CAPITAL
INVESTMENT CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the
three
|
|
For the
three
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
March 31, 2023
|
|
March 31, 2022
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net increase in net
assets resulting from operations
|
|
$
|
4,736,147
|
|
$
|
5,222,164
|
|
|
Adjustments to
reconcile net increase in net assets from operations to net cash
used in operating activities:
|
|
|
|
|
|
|
|
|
Purchases of
investments
|
|
|
(41,237,273)
|
|
|
(74,535,403)
|
|
|
Proceeds from sales
and repayments of investments
|
|
|
5,890,813
|
|
|
10,008,127
|
|
|
Net change in
unrealized depreciation on investments
|
|
|
4,249,642
|
|
|
3,721,602
|
|
|
Net change in
unrealized depreciation on foreign currency translations
|
|
|
10,126
|
|
|
—
|
|
|
Increase in
investments due to PIK
|
|
|
(769,954)
|
|
|
(330,111)
|
|
|
Amortization of
premium and accretion of discount, net
|
|
|
(665,998)
|
|
|
(546,806)
|
|
|
Deferred tax
provision
|
|
|
78,760
|
|
|
21,157
|
|
|
Amortization of loan
structure fees
|
|
|
143,822
|
|
|
133,262
|
|
|
Amortization of
deferred financing costs
|
|
|
110,150
|
|
|
83,670
|
|
|
Amortization of loan
fees on SBA-guaranteed debentures
|
|
|
317,508
|
|
|
283,144
|
|
|
Net realized gain on
investments
|
|
|
(34,967)
|
|
|
(3,458,090)
|
|
|
Changes in other assets
and liabilities
|
|
|
|
|
|
|
|
|
(Increase) decrease in
interest receivable
|
|
|
(187,420)
|
|
|
179,927
|
|
|
Decrease in other
receivable
|
|
|
—
|
|
|
4,257
|
|
|
Decrease in prepaid
expenses
|
|
|
148,414
|
|
|
9,959
|
|
|
(Decrease) increase in
management fees payable
|
|
|
(2,592,566)
|
|
|
492,713
|
|
|
Increase (decrease) in
income incentive fees payable
|
|
|
2,124,835
|
|
|
(1,000,000)
|
|
|
Decrease in capital
gains incentive fees payable
|
|
|
(569,528)
|
|
|
(42,217)
|
|
|
Increase in
administrative services payable
|
|
|
39,951
|
|
|
18,320
|
|
|
Decrease in interest
payable
|
|
|
(3,437,073)
|
|
|
(2,855,244)
|
|
|
Decrease in related
party payable
|
|
|
(646,393)
|
|
|
—
|
|
|
Decrease in unearned
revenue
|
|
|
(47,573)
|
|
|
(62,731)
|
|
|
Increase (decrease) in
income tax payable
|
|
|
374,460
|
|
|
(755,312)
|
|
|
(Decrease) increase in
other accrued expenses and liabilities
|
|
|
(78,907)
|
|
|
482,638
|
|
|
Net Cash Used in
Operating Activities
|
|
$
|
(32,043,024)
|
|
$
|
(62,924,974)
|
|
|
Cash flows from
Financing Activities
|
|
|
|
|
|
|
|
|
Proceeds from the
issuance of common stock
|
|
$
|
8,487,127
|
|
$
|
221,176
|
|
|
Sales load for common
stock issued
|
|
|
(126,303)
|
|
|
(3,137)
|
|
|
Offering costs paid
for common stock issued
|
|
|
(72,955)
|
|
|
(50,369)
|
|
|
Stockholder
distributions paid
|
|
|
(5,252,174)
|
|
|
(4,422,688)
|
|
|
Proceeds from
SBA-guaranteed debentures
|
|
|
—
|
|
|
20,000,000
|
|
|
Financing costs paid
on SBA-guaranteed debentures
|
|
|
—
|
|
|
(487,000)
|
|
|
Financing costs paid
on Credit facility
|
|
|
—
|
|
|
(25,881)
|
|
|
Borrowings under
Credit Facility
|
|
|
13,300,000
|
|
|
57,388,800
|
|
|
Repayments of Credit
Facility
|
|
|
(14,483,900)
|
|
|
(29,240,000)
|
|
|
Net Cash Provided by
Financing Activities
|
|
$
|
1,851,795
|
|
$
|
43,380,901
|
|
|
Net Decrease in Cash
and Cash Equivalents
|
|
$
|
(30,191,229)
|
|
$
|
(19,544,073)
|
|
|
Cash and Cash
Equivalents Balance at Beginning of Period
|
|
|
48,043,329
|
|
|
44,174,856
|
|
|
Cash and Cash
Equivalents Balance at End of Period
|
|
$
|
17,852,100
|
|
$
|
24,630,783
|
|
|
Supplemental and
Non-Cash Activities
|
|
|
|
|
|
|
|
|
Cash paid for interest
expense
|
|
$
|
10,752,017
|
|
$
|
7,216,009
|
|
|
Income and excise tax
paid
|
|
|
303
|
|
|
1,034,730
|
|
|
Increase in dividends
payable
|
|
|
2,699,110
|
|
|
1,041,978
|
|
|
Increase in deferred
offering costs
|
|
|
2,700
|
|
|
26,481
|
|
|
Reconciliation of
Core Net Investment
Income (1)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31, 2023
|
|
March 31, 2022
|
|
Net investment
income
|
|
$9,067,620
|
|
$5,514,183
|
|
Capital gains incentive
fee
|
|
(569,528)
|
|
(42,217)
|
|
Income tax
expense
|
|
374,763
|
|
279,417
|
|
Core net investment
income
|
|
$8,872,855
|
|
$5,751,383
|
|
|
|
|
|
|
Per share
amounts:
|
|
|
|
|
|
Net investment income
per share
|
|
$0.46
|
|
$0.28
|
|
Core net investment
income per share
|
|
$0.45
|
|
$0.29
|
|
Reconciliation of
Realized Net Investment
Income (2)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31, 2023
|
|
March 31, 2022
|
|
Net investment
income
|
|
$9,067,620
|
|
$5,514,183
|
|
Net realized gain on
investments
|
|
34,967
|
|
3,458,090
|
|
Net realized loss on
foreign currency translation
|
|
(39,912)
|
|
(7,350)
|
|
Total Realized Net
Investment Income
|
|
$9,062,675
|
|
$8,964,923
|
|
|
|
|
|
|
Per share
amounts:
|
|
|
|
|
|
Net investment income
per share
|
|
$0.46
|
|
$0.28
|
|
Realized net investment
income per share
|
|
$0.46
|
|
$0.46
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/stellus-capital-investment-corporation-reports-results-for-its-first-fiscal-quarter-ended-march-31-2023-301820166.html
SOURCE Stellus Capital Investment Corporation
