Crescent Capital BDC, Inc. Reports Second Quarter 2024 Earnings Results; Declares a Third Quarter Base Dividend of $0.42 Per Share, and a Second Quarter Supplemental Dividend of $0.09 Per Share

Rhea-AI Summary

Crescent Capital BDC (NASDAQ: CCAP) reported its Q2 2024 earnings, with net investment income of $0.59 per share and net income of $0.55 per share. The company's net asset value per share increased to $20.30 from $20.28 in the previous quarter. The Board declared a Q3 2024 regular cash dividend of $0.42 per share and a Q2 2024 supplemental cash dividend of $0.09 per share. As of June 30, 2024, CCAP had investments in 183 portfolio companies with an aggregate fair value of $1,610.8 million. The company's debt to equity ratio was 1.18x, and it had $36.1 million in cash and cash equivalents and $293.8 million of undrawn capacity on its credit facilities.

Positive

• Net asset value per share increased to $20.30 from $20.28 in the previous quarter
• Declared a Q3 2024 regular cash dividend of $0.42 per share and a Q2 2024 supplemental cash dividend of $0.09 per share
• Investment income increased to $48.9 million from $46.7 million year-over-year
• Weighted average yield on income producing securities at cost increased to 12.2% from 11.7% year-over-year

Negative

• Net investment income decreased to $21.7 million from $23.4 million in the previous quarter
• Net realized losses of $4.1 million for the quarter
• Debt to equity ratio increased to 1.18x

Insights

Financial Analyst

Crescent Capital BDC's Q2 2024 results show a mixed performance. The company reported $0.59 net investment income per share, down from $0.63 in Q1 2024 but up from $0.56 in Q2 2023. Net asset value per share slightly increased to $20.30 from $20.28 in the previous quarter.

The company's investment portfolio grew to $1.61 billion, up 3% from Q1 2024. The weighted average yield on income-producing securities remained strong at 12.2%, though slightly down from 12.3% in Q1. The debt-to-equity ratio of 1.18x indicates a moderate level of leverage.

The declaration of a $0.42 regular dividend and a $0.09 supplemental dividend demonstrates confidence in the company's earnings power. However, investors should note the decrease in net investment income and the $4.1 million net realized loss this quarter.

Market Research Analyst

Crescent Capital BDC's Q2 results reflect the current challenging market conditions for Business Development Companies (BDCs). The slight increase in NAV and maintained dividend levels are positive signs, but the decrease in net investment income suggests some pressure on earnings.

The company's portfolio composition remains heavily weighted towards first lien and unitranche loans (89.5% combined), indicating a conservative approach to credit risk. The high percentage of floating rate debt (96.9%) positions the company well in a rising rate environment, but could become a challenge if rates decline.

Investors should monitor the company's ability to maintain its dividend coverage and the quality of its portfolio, particularly given the $4.1 million net realized loss this quarter. The supplemental dividend suggests excess earnings, but sustainability will be key in coming quarters.

LOS ANGELES, Aug. 12, 2024 (GLOBE NEWSWIRE) -- Crescent Capital BDC, Inc. (“Crescent BDC” or “Company”) (NASDAQ: CCAP) today reported net investment income of $0.59 per share and net income of $0.55 per share for the quarter ended June 30, 2024. Net asset value per share increased to $20.30 compared to $20.28 as of March 31, 2024.

Dividend Declarations  

The Company’s Board of Directors (the “Board”) declared a third quarter 2024 regular cash dividend of $0.42 per share to stockholders of record as of September 30, 2024, payable on October 15, 2024. The Board also announced a second quarter 2024 supplemental cash dividend of $0.09 per share to stockholders of record as of August 31, 2024, payable on September 16, 2024.

Selected Financial Highlights ($ in millions, except per share amounts)
		As of and for the three months ended
		June 30, 2024					March 31, 2024					June 30, 2023
Investments, at fair value		$		1,610.8			$		1,563.3			$		1,581.1
Total assets		$		1,672.4			$		1,620.4			$		1,624.6
Total net assets		$		752.4			$		751.7			$		725.8
Net asset value per share		$		20.30			$		20.28			$		19.58
Investment income		$		48.9			$		50.4			$		46.7
Net investment income		$		21.7			$		23.4			$		20.6
Net realized gains (losses), net of taxes		$		(4.1	)		$		(0.2	)		$		(6.6	)
Net change in unrealized gains (losses), net of taxes		$		2.8			$		4.9			$		8.6
Net increase (decrease) in net assets resulting from operations		$		20.4			$		28.0			$		22.6
Net investment income per share		$		0.59			$		0.63			$		0.56
Net realized gains (losses) per share, net of taxes		$		(0.11	)		$		(0.00	)		$		(0.18	)
Net change in unrealized gains (losses) per share, net of taxes		$		0.07			$		0.13			$		0.23
Net increase (decrease) in net assets resulting from operations per share		$		0.55			$		0.76			$		0.61
Regular distributions paid per share		$		0.42			$		0.41			$		0.41
Supplemental distributions paid per share		$		0.11			$		0.10					-
Weighted average yield on income producing securities (at cost)1				12.2	%				12.3	%				11.7	%
Percentage of debt investments at floating rates				96.9	%				97.5	%				98.6	%

Portfolio & Investment Activity

As of June 30, 2024 and December 31, 2023, the Company had investments in 183 and 186 portfolio companies with an aggregate fair value of $1,610.8 and $1,582.1 million, respectively. The portfolio at fair value was comprised of the following asset types:

Portfolio Asset Types:
		As of
$ in millions		June 30, 2024										December 31, 2023
Investment Type		Fair Value					Percentage					Fair Value					Percentage
Senior secured first lien		$		432.9				26.8		%		$		429.2				27.0		%
Unitranche first lien2				1,005.3				62.4						973.9				61.5
Unitranche first lien - last out2				5.6				0.3						13.5				0.9
Senior secured second lien				49.5				3.1						58.2				3.7
Unsecured debt				15.6				1.0						4.1				0.3
Equity & other				57.2				3.6						50.1				3.2
LLC/LP equity interests				44.7				2.8						53.1				3.4
Total investments		$		1,610.8				100.0		%		$		1,582.1				100.0		%

For the quarter ended June 30, 2024, the Company invested $119.3 million across six new portfolio companies and several follow-on revolver and delayed draw fundings. During this period, the Company had $73.4 million in aggregate exits, sales and repayments. For the quarter ended March 31, 2024, the Company invested $73.9 million across seven new portfolio companies and several follow-on revolver and delayed draw fundings. During this period, the Company had $98.4 million in aggregate exits, sales and repayments.

Results of Operations

For the quarter ended June 30, 2024 and 2023, investment income was $48.9 million and $46.7 million, respectively. The increase in investment income was largely the result of net funding activity and an increase in reference rates. Net expenses, including income and excise taxes, totaled $27.2 million and $26.1 million for the quarter ended June 30, 2024 and 2023, respectively. The increase in net expenses was primarily due to an increase in reference rates which increased the Company's weighted average interest rate on debt outstanding.

Liquidity and Capital Resources

As of June 30, 2024, the Company had $36.1 million in cash and cash equivalents and restricted cash and $293.8 million of undrawn capacity on its credit facilities, subject to borrowing base and other limitations. The weighted average cost of debt on the Company’s debt outstanding as of June 30, 2024 was 7.26%.

The Company’s debt to equity ratio was 1.18x as of June 30, 2024.

Conference Call

The Company will host a webcast/conference call on Tuesday, August 13, 2024 at 12:00 p.m. (Eastern Time) to discuss its financial results for the quarter ended June 30, 2024. Please visit Crescent BDC’s webcast link located on the Events & Presentations page of the Investor Relations section of Crescent BDC’s website for a slide presentation that complements the earnings conference call.

All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Events & Presentations page of the Investor Resources section of Crescent BDC’s website at www.crescentbdc.com. Please visit the website to test your connection before the webcast. Participants are also invited to access the conference call by dialing the following number:

Toll Free: (800) 267-6316
Conference ID: CRESCENT

All callers will need to reference the Conference ID once connected with the operator. An archived replay will be available via a webcast link located on the Investor Relations section of Crescent BDC's website.

Endnotes

Note: Numbers may not sum due to rounding.

1)   Yield includes performing debt and other income producing investments (excluding investments on non-accrual).

2)   Unitranche loans are first lien loans that may extend deeper in a company’s capital structure than traditional first lien debt and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan. In certain instances, the Company may find another lender to provide the “first out” portion of such loan and retain the “last out” portion of such loan, in which case, the “first out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last out” portion that the Company would continue to hold. In exchange for the greater risk of loss, the “last out” portion earns a higher interest rate.

Crescent Capital BDC, Inc. Consolidated Statements of Assets and Liabilities (in thousands except share and per share data)
	As of June 30, 2024				As of December 31, 2023
Assets
Investments, at fair value
Non-controlled non-affiliated investments (cost of$1,493,976 and $1,469,251, respectively)	$	1,501,420			$	1,465,537
Non-controlled affiliated investments (cost of $54,294 and $56,084, respectively)		52,023				52,619
Controlled investments (cost of $64,619 and $67,353, respectively)		57,332				63,919
Cash and cash equivalents		11,018				7,780
Restricted cash and cash equivalents		25,124				16,690
Interest and dividend receivable		16,089				14,000
Receivable from unsettled transactions		2,549				251
Unrealized appreciation on foreign currency forward contracts		2,765				5,128
Deferred tax assets		939				114
Other assets		3,173				1,341
Total assets	$	1,672,432			$	1,627,379
Liabilities
Debt (net of deferred financing costs of $7,903 and $7,138)	$	879,934			$	844,783
Distributions payable		15,566				15,195
Interest and other debt financing costs payable		11,038				10,900
Management fees payable		5,001				5,026
Incentive fees payable		4,603				4,770
Deferred tax liabilities		883				578
Unrealized depreciation on foreign currency forward contracts		42				84
Accrued expenses and other liabilities		2,925				3,449
Total liabilities	$	919,992			$	884,785
Net assets
Preferred stock, par value $0.001 per share (10,000 shares authorized, zero outstanding, respectively)	$	-			$	-
Common stock, par value $0.001 per share (200,000,000 shares authorized, 37,061,547 and 30,887,360 shares issued and outstanding, respectively)		37				37
Paid-in capital in excess of par value		965,895				788,299
Accumulated earnings (loss)		(213,492	)			(45,742	)
Total net assets	$	752,440			$	742,594
Total liabilities and net assets	$	1,672,432			$	1,627,379
Net asset value per share	$	20.30			$	20.04

Crescent Capital BDC, Inc. Consolidated Statements of Operations (in thousands except share and per share data) (Unaudited)
		For the three months ended June 30,								For the six months ended June 30,
			2024				2023				2024				2023
Investment Income:
From non-controlled non-affiliated investments:
Interest income		$	41,973			$	41,255			$	85,536			$	75,501
Paid-in-kind interest			2,060				650				3,215				1,268
Dividend income			2				75				395				79
Other income			779				181				1,667				228
From non-controlled affiliated investments:
Interest income			1,099				740				1,791				1,352
Paid-in-kind interest			67				186				509				235
Dividend income			—				551				287				1,179
Other income			16				149				16				149
From controlled investments:
Interest income			312				154				611				320
Paid-in-kind interest			—				—				—				192
Dividend income			2,640				2,800				5,280				5,520
Other income			3				—				5				—
Total investment income			48,951				46,741				99,312				86,023
Expenses:
Interest and other debt financing costs			15,931				15,273				31,535				27,642
Management fees			5,034				5,010				10,014				9,468
Income based incentive fees			4,603				4,349				9,541				8,041
Professional fees			451				427				897				737
Directors’ fees			151				138				308				306
Other general and administrative expenses			678				753				1,305				1,478
Total expenses			26,848				25,950				53,600				47,672
Management fees waiver			(33	)			(50	)			(71	)			(96	)
Income based incentive fees waiver			—				(71	)			(36	)			(159	)
Net expenses			26,815				25,829				53,493				47,417
Net investment income before taxes			22,136				20,912				45,819				38,606
(Benefit) provision for income and excise taxes			433				340				800				541
Net investment income			21,703				20,572				45,019				38,065
Net realized and unrealized gains (losses) on investments:
Net realized gain (loss) on:
Non-controlled non-affiliated investments			(5,332	)			(6,494	)			(6,935	)			(6,243	)
Foreign currency transactions			(508	)			(58	)			(519	)			(58	)
Foreign currency forward contracts			1,776				—				3,223				—
Net change in unrealized appreciation (depreciation) on:
Non-controlled non-affiliated investments and foreign currency translation			7,191				10,010				12,061				4,456
Non-controlled affiliated investments			966				174				1,194				539
Controlled investments			(3,628	)			(1,641	)			(3,853	)			(5,970	)
Foreign currency forward contracts			(1,964	)			(578	)			(2,320	)			(1,239	)
Net realized and unrealized gains (losses) on investments			(1,499	)			1,413				2,851				(8,515	)
Benefit (provision) for taxes on realized gain on investments			—				—				—				252
Benefit (provision) for taxes on unrealized appreciation (depreciation) on investments			181				595				520				555
Net increase (decrease) in net assets resulting from operations		$	20,385			$	22,580			$	48,390			$	30,357
Per common share data:
Net increase (decrease) in net assets resulting from operations per share (basic and diluted):		$	0.55			$	0.61			$	1.31			$	0.87
Net investment income per share (basic and diluted):		$	0.59			$	0.56			$	1.21			$	1.09
Weighted average shares outstanding (basic and diluted):			37,061,547				37,061,547				37,061,547				34,776,074

About Crescent BDC

Crescent BDC is a business development company that seeks to maximize the total return of its stockholders in the form of current income and capital appreciation by providing capital solutions to middle market companies with sound business fundamentals and strong growth prospects. Crescent BDC utilizes the extensive experience, origination capabilities and disciplined investment process of Crescent. Crescent BDC is externally managed by Crescent Cap Advisors, LLC, a subsidiary of Crescent. Crescent BDC has elected to be regulated as a business development company under the Investment Company Act of 1940. For more information about Crescent BDC, visit www.crescentbdc.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.

About Crescent Capital Group

Crescent is a global credit investment manager with over $42 billion of assets under management. For over 30 years, the firm has focused on below investment grade credit through strategies that invest in marketable and privately originated debt securities including senior bank loans, high yield bonds, as well as private senior, unitranche and junior debt securities. Crescent is headquartered in Los Angeles with offices in New York, Boston, Chicago and London with more than 225 employees globally. Crescent is a part of SLC Management, the institutional alternatives and traditional asset management business of Sun Life. For more information about Crescent, visit www.crescentcap.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.

Contact:

Dan McMahon
daniel.mcmahon@crescentcap.com        
212-364-0149
        
Forward-Looking Statements

This press release, and other statements that Crescent BDC may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Crescent BDC’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.

Crescent BDC 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 Crescent BDC 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 Crescent BDC’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 adviser 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 adviser or its affiliates; (13) the ability of our investment adviser 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, 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.

Crescent BDC’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, identifies additional factors that can affect forward-looking statements.

Other Information

The information in this press release is summary information only and should be read in conjunction with Crescent BDC’s annual report on Form 10-K for the year ended December 31, 2023, which Crescent BDC filed with the U.S. Securities and Exchange Commission (the SEC) on February 21, 2024, as well as Crescent BDC’s other reports filed with the SEC. A copy of Crescent BDC’s annual report on Form 10-K for the year ended December 31, 2023, Crescent BDC’s quarterly reports on Form 10-Q and Crescent BDC’s other reports filed with the SEC can be found on Crescent BDC’s website at www.crescentbdc.com and the SEC’s website at www.sec.gov.

FAQ

What was Crescent Capital BDC's (CCAP) net investment income per share for Q2 2024?

Crescent Capital BDC (CCAP) reported net investment income of $0.59 per share for Q2 2024.

How much did CCAP's net asset value per share increase to in Q2 2024?

CCAP's net asset value per share increased to $20.30 as of June 30, 2024, compared to $20.28 as of March 31, 2024.

What dividends did Crescent Capital BDC (CCAP) declare for Q3 2024?

CCAP declared a Q3 2024 regular cash dividend of $0.42 per share and a Q2 2024 supplemental cash dividend of $0.09 per share.

How many portfolio companies did CCAP have investments in as of June 30, 2024?

As of June 30, 2024, CCAP had investments in 183 portfolio companies with an aggregate fair value of $1,610.8 million.