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NEW YORK, September 25, 2024--(BUSINESS WIRE)--Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) ("ICMB" or the "Company") announced its financial results today for its fourth quarter and fiscal year ended June 30, 2024.

HIGHLIGHTS

Portfolio results, as of and for the three months ended June 30, 2024:

Total assets

$192.2mm

Investment portfolio, at fair value

$184.6mm

Net assets

$75.01mm

Weighted average yield on debt investments, at cost (1)

12.33%

Net asset value per share

$5.21

Portfolio activity in the current quarter:

Number of investments in new portfolio companies during the period

2

Number of portfolio companies invested in, end of period

41

Total capital invested in existing portfolio companies (2)

$8.5mm

Total proceeds from repayments, sales, and amortization (3)

$23.5mm

Net investment income (NII)

$1.3mm

Net investment income per share

$0.09

Net decrease in net assets from operations

$(2.5)mm

Net decrease in net assets from operations per share

$(0.17)

Quarterly per share distribution paid on June 30, 2024

$0.15

(1) Represents weighted average yield on total debt investments for the three months ended June 30, 2024. Weighted average yield on total debt investments is the annualized rate of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average yield on total debt investments reflected above does not represent actual investment returns to the Company’s stockholders.

(2) Includes gross advances to existing revolving credit commitments to portfolio companies and PIK interest

(3) Includes gross repayments on existing delayed draw and revolving credit commitments to portfolio companies

Mr. Suhail A. Shaikh said "During the quarter, we navigated a persistently challenging market environment characterized by subdued new deal activity and heightened competition for high-quality assets. Despite these headwinds, we remained disciplined in our investment approach, focusing on opportunities that align with our rigorous underwriting standards. While refinancing activity provided some avenues for capital deployment, we are maintaining a highly selective stance on new deals. Our priority continues to be preserving the stability of our portfolio and positioning the company for long-term growth as market conditions evolve."

The Company’s dividend framework provides a quarterly base dividend and may be supplemented, at the discretion of the Board, by additional dividends as determined to be available by the Company’s net investment income and performance during the quarter.

On September 18, 2024, the Board declared a distribution for the quarter ended September 30, 2024 of $0.12 per share payable on November 6, 2024 to stockholders of record as of October 16, 2024.

This distribution represents a 14.29% yield on the Company’s $3.36 share price as of market close on June 28, 2024. Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect the dividend for the quarter ending June 30, 2024, to be comprised of a return of capital. The Company’s investment adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. The Company estimates the source of its distributions as required by Section 19(a) of the Investment Company Act of 1940 to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods, but the Company will not be able to determine whether any specific distribution will be treated as taxable earnings or as a return of capital until after at the end of the taxable year.

Portfolio and Investment Activities

During the quarter, the Company made investments in two new portfolio companies and three existing portfolio companies. The aggregate capital invested during the quarter totaled $17.9 million, at cost, and the debt investments were made at a weighted average yield of 10.23%.

The Company received proceeds of $23.5 million from repayments, sales and amortization during the quarter, primarily related to the realization of Empire Office Inc., Northstar Group Services, Inc., and Potpourri Group, Inc.

During the quarter, the Company had net repayments of $0.4 million on its existing delayed draw and revolving credit commitments to portfolio companies.

The Company’s net realized, and unrealized gains and losses accounted for a decrease in the Company’s net investments of approximately $3.8 million, or $0.26 per share. The total net decrease in net assets resulting from operations for the quarter was $(2.5) million, or $(0.17) per share.

As of June 30, 2024, the Company’s investment portfolio consisted of investments in 41 portfolio companies, of which 85.02% were first lien investments and 14.98% were equity, warrants, and other investments. The Company’s debt portfolio consisted of 97.4% floating rate investments and 2.6% fixed rate investments.

Capital Resources

As of June 30, 2024, the Company had $5.1 million in cash, of which $4.95 million was restricted cash, and $57.0 million of unused and available capacity under its revolving credit facility with Capital One, N.A.

Subsequent Events

Subsequent to June 30, 2024 and through September 25, 2024, the Company invested a total of $12.9 million, which included investments in three new portfolio companies and two existing portfolio companies. As of September 25, 2024, the Company had investments in 44 portfolio companies.

Investcorp Credit Management BDC, Inc. and Subsidiaries

Consolidated Statements of Assets and Liabilities

June 30, 2024

June 30, 2023

Assets

Non-controlled, non-affiliated investments, at fair value (amortized cost of $189,319,802 and $219,319,251, respectively)

$

181,948,376

$

210,150,018

Affiliated investments, at fair value (amortized cost of $15,149,238 and $23,979,565, respectively)

2,621,154

9,961,311

Total investments, at fair value (amortized cost of $204,469,040 and $243,298,816, respectively)

184,569,530

220,111,329

Cash

158,768

1,093,758

Cash, restricted

4,950,036

8,057,458

Principal receivable

50,609

93,581

Interest receivable

1,301,516

2,041,877

Payment-in-kind interest receivable

66,625

46,088

Long-term receivable

631,667

Escrow receivable

97,173

Other receivables

1,050

Prepaid expenses and other assets

411,821

361,719

Total Assets

$

192,237,745

$

231,806,860

Liabilities

Notes payable:

Revolving credit facility

$

43,000,000

$

71,900,000

2026 Notes payable

65,000,000

65,000,000

Deferred debt issuance costs

(1,654,870

)

(1,220,556

)

Unamortized discount

(124,443

)

(195,553

)

Notes payable, net

106,220,687

135,483,891

Payable for investments purchased

7,425,000

1,795,297

Dividend payable

2,590,520

Income-based incentive fees payable

128,876

576,023

Base management fees payable

816,777

906,218

Interest payable

1,950,925

2,293,766

Directors' fees payable

15,755

Accrued expenses and other liabilities

685,271

445,082

Total Liabilities

117,227,536

144,106,552

Commitments and Contingencies (see Note 6)

Net Assets

Common stock, par value $0.001 per share (100,000,000 shares authorized and 14,403,752 and 14,391,775 shares issued and outstanding, respectively)

14,404

14,392

Additional paid-in capital

203,103,263

203,327,714

Distributable earnings (loss)

(128,107,458

)

(115,641,798

)

Total Net Assets

75,010,209

87,700,308

Total Liabilities and Net Assets

$

192,237,745

$

231,806,860

Net Asset Value Per Share

$

5.21

$

6.09

Investcorp Credit Management BDC, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

For the Years Ended June 30,

2024

2023

2022

Investment Income:

Interest income

Non-controlled, non-affiliated investments

$

20,271,776

$

23,822,181

$

22,641,798

Affiliated investments

12,451

(20,611

)

29,813

Total interest income

20,284,227

23,801,570

22,671,611

Payment in-kind interest income

Non-controlled, non-affiliated investments

2,028,744

1,250,169

102,720

Affiliated investments

77,680

70,070

208,470

Total payment-in-kind interest income

2,106,424

1,320,239

311,190

Dividend income

Non-controlled, non-affiliated investments

54,138

101,755

Affiliated investments

296,126

Total dividend income

54,138

101,755

296,126

Payment in-kind dividend income

Non-controlled, non-affiliated investments

784,854

691,972

282,952

Affiliated investments

Total payment-in-kind dividend income

784,854

691,972

282,952

Other fee income

Non-controlled, non-affiliated investments

648,659

768,617

868,727

Affiliated investments

759

Total other fee income

648,659

768,617

869,486

Total investment income

23,878,302

26,684,153

24,431,365

Expenses:

Interest expense

8,606,309

8,413,409

6,633,587

Base management fees

3,800,693

4,201,394

4,594,588

Income-based incentive fees

(72,942

)

401,597

(348,670

)

Provision for tax expense

267,150

294,330

270,618

Professional fees

1,239,122

984,290

1,302,513

Allocation of administrative costs from Adviser

1,360,194

966,045

1,247,205

Amortization of deferred debt issuance costs

576,475

693,333

621,111

Amortization of original issue discount - 2026 Notes

71,110

71,110

71,110

Insurance expense

479,502

506,963

512,347

Directors' fees

294,907

302,500

302,500

Custodian and administrator fees

316,128

292,267

334,214

Other expenses

713,789

516,160

446,330

Total expenses

17,652,437

17,643,398

15,987,453

Waiver of base management fees

(365,225

)

(387,311

)

(480,032

)

Waiver of income-based incentive fees

Net expenses

17,287,212

17,256,087

15,507,421

Net investment income

6,591,090

9,428,066

8,923,944

Net realized and unrealized gain/(loss) on investments:

Net realized gain (loss) from investments

Non-controlled, non-affiliated investments

(7,731,553

)

(26,890,095

)

(6,198,762

)

Affiliated investments

(6,239,984

)

-

(8,196,669

)

Net realized gain (loss) from investments

(13,971,537

)

(26,890,095

)

(14,395,431

)

Net change in unrealized appreciation (depreciation) in value of investments

Non-controlled, non-affiliated investments

1,797,807

21,966,347

2,898,538

Affiliated investments

1,490,170

(1,269,815

)

5,159,579

Net change in unrealized appreciation (depreciation) on investments

3,287,977

20,696,532

8,058,117

Total realized gain (loss) and change in unrealized appreciation (depreciation) on investments

(10,683,560

)

(6,193,563

)

(6,337,314

)

Net increase (decrease) in net assets resulting from operations

$

(4,092,470

)

$

3,234,503

$

2,586,630

Basic and diluted:

Net investment income per share

$

0.46

$

0.66

$

0.62

Earnings per share

$

(0.28

)

$

0.22

$

0.18

Weighted average shares of common stock outstanding

14,396,201

14,389,163

14,304,641

Distributions paid per common share

$

0.60

$

0.63

$

0.60

About Investcorp Credit Management BDC, Inc.

The Company is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50 million and earnings before interest, taxes, depreciation, and amortization of at least $15 million. The Company’s investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about Investcorp Credit Management BDC, Inc., please visit www.icmbdc.com.

Forward-Looking Statements

Statements included in this press release and made on the earnings call for the quarter ended December 31, 2023, may contain "forward-looking statements," which relate to future performance, operating results, events and/or financial condition. Words such as "anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could," "should," "targets," "projects," and variations of these words and similar expressions are intended to identify forward-looking statements. Any forward-looking statements, including statements other than statements of historical facts, included in this press release or made on the earnings call are based upon current expectations, are inherently uncertain, and involve a number of assumptions and substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control.

Investors are cautioned not to place undue reliance on these forward-looking statements. Any such statements are likely to be affected by other unknowable future events and conditions, which the Company may or may not have considered, including, without limitation, changes in base interest rates and the effects of significant market volatility on our business, our portfolio companies, our industry and the global economy. Accordingly, such statements cannot be guarantees or assurances of any aspect of future performance or events. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors and risks. More information on these risks and other potential factors that could affect actual events and the Company’s performance and financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein or discussed on the earnings call, is or will be included in the Company’s filings with the Securities and Exchange Commission, including in the "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. All forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240925927968/en/

Contacts

Investcorp Credit Management BDC, Inc.
Investor Relations
Email: [email protected]
Phone: (646) 690-5047

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