Crescent Capital BDC, Inc. Reports Third Quarter 2021 Financial Results; Declares a Fourth Quarter 2021 Regular Dividend of $0.41 per Share and a Special Dividend of $0.05 per Share

Rhea-AI Summary

Crescent Capital BDC (CCAP) reported a net investment income of $12.7 million ($0.45 per share) for Q3 2021, up from $11 million in Q2 2021. Adjusted net investment income was $13.5 million ($0.48 per share). The net asset value per share rose to $21.16 compared to $20.98 in the previous quarter. The firm declared cash dividends totaling $0.41 per share for regular dividends and additional special dividends worth $0.05 each. Investments at fair value increased to $1,138.6 million, with a portfolio comprising 132 companies.

Positive

• Net investment income increased from $11 million in Q2 to $12.7 million in Q3.
• Adjusted net investment income rose to $13.5 million, exceeding previous quarter's $14.8 million.
• Net asset value per share improved from $20.98 to $21.16.
• Total investments at fair value increased to $1,138.6 million from $1,095 million.

Negative

• Net change in unrealized losses was $(23.9) million, compared to gains of $19.4 million in Q2.
• Total expenses remained constant at $12.8 million, indicating a lack of expense reduction.

LOS ANGELES, Nov. 10, 2021 (GLOBE NEWSWIRE) -- Crescent Capital BDC, Inc. (“Crescent BDC” or “Company”) (NASDAQ: CCAP) today reported net investment income of $12.7 million, or $0.45 per share, and Adjusted Net Investment Income of $13.5 million, or $0.48 per share,¹ for the quarter ended September 30, 2021. Reported net asset value per share was $21.16 at September 30, 2021 as compared to $20.98 at June 30, 2021.

The Company announced that its Board of Directors declared the following cash dividends on November 5, 2021:

Cash Dividend Type		Record Date		Payment Date		Amount Per Share
Regular		December 31, 2021		January 17, 2022		$	0.41
Special		December 3, 2021		December 15, 2021		$	0.05
Special		March 4, 2022		March 15, 2022		$	0.05
Special		June 3, 2022		June 15, 2022		$	0.05
Special		September 2, 2022		September 15, 2022		$	0.05

Selected Financial Highlights
($ in millions, except per share amounts)

		As of and for the Three Months Ended
		September 30, 2021				June 30, 2021				September 30, 2020
Investments, at fair value		$	1,138.6			$	1,095.0			$	961.1
Total assets		$	1,183.2			$	1,128.5			$	980.5
Total net assets		$	596.2			$	591.0			$	537.1
Net asset value per share		$	21.16			$	20.98			$	19.07
Investment income		$	25.5			$	23.8			$	18.7
Net investment income		$	12.7			$	11.0			$	12.2
Net realized gains (losses), net of taxes		$	27.9			$	2.2			$	(0.5	)
Net change in unrealized gains (losses), net of taxes		$	(23.9	)		$	19.4			$	26.6
Net increase (decrease) in net assets resulting from operations		$	16.7			$	32.6			$	38.3
Net investment income per share		$	0.45			$	0.39			$	0.43
Net realized gains (losses) per share, net of taxes		$	0.99			$	0.08			$	(0.02	)
Net change in unrealized gains (losses) per share, net of taxes		$	(0.85	)		$	0.69			$	0.95
Net increase (decrease) in net assets resulting from operations per share		$	0.59			$	1.16			$	1.36
Distributions paid per share		$	0.41			$	0.41			$	0.41
Non-GAAP Financial Measures1:
Adjusted net investment income		$	13.5			$	14.8			$	12.2
Adjusted net investment income per share		$	0.48			$	0.53			$	0.43
Weighted average yield on income producing securities (at cost)2			7.6	%			7.8	%			7.9	%
Percentage of debt investments at floating rates			99.7	%			99.6	%			98.0	%

Portfolio & Investment Activity

As of September 30, 2021 and June 30, 2021, the Company had investments in 132 and 130 portfolio companies with an aggregate fair value of $1,138.6 and $1,095.0 million, respectively. The portfolio at fair value was comprised of the following asset types:

Portfolio Asset Types:
		As of
$ in millions		September 30, 2021							June 30, 2021
Investment Type		Fair Value			Percentage				Fair Value			Percentage
Senior secured first lien		$	349.8			30.7	%		$	371.1			32.6	%
Unitranche first lien3			597.0			52.4				493.7			45.0
Unitranche first lien - last out3			13.5			1.2				13.9			1.3
Senior secured second lien			56.4			5.0				65.3			6.0
Unsecured debt			5.4			0.5				5.5			0.5
Equity & other			57.9			5.1				89.9			8.2
LLC/LP equity interests			58.6			5.1				55.6			5.1
Total investments		$	1,138.6			100.0	%		$	1,095.0			100.0	%

For the quarter ended September 30, 2021, the Company invested $158.5 million across 12 new portfolio companies, 10 existing portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $122.8 million in aggregate exits, sales and repayments.

For the quarter ended June 30, 2021, the Company invested $121.0 million across 11 new portfolio companies, 13 existing portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $109.6 million in aggregate exits, sales and repayments.

Results of Operations

For the quarter ended September 30, 2021 and June 30, 2021, investment income totaled $25.5 million and $23.8 million, respectively. The increase was primarily driven by interest income, as organic net deployment drove an increase in the size of the Company’s income-producing investment portfolio and paydown activity led to higher accelerated accretion of OID.

For the quarter ended September 30, 2021 and June 30, 2021, total expenses, including income and excise taxes, totaled $12.8 million, respectively.

Liquidity and Capital Resources

As of September 30, 2021, the Company had $19.5 million in cash and cash equivalents and restricted cash and $173.1 million of undrawn capacity on its credit facilities, subject to borrowing base and other limitations. The weighted average interest rate on the Company’s debt outstanding as of September 30, 2021 was 3.32%.

The Company’s debt to equity ratio was 0.94x as of September 30, 2021.

Non-GAAP Financial Measures

On a supplemental basis, the Company is disclosing Adjusted Net Investment Income and Adjusted Net Investment Income per share, each of which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with U.S. GAAP (“non-GAAP”). Adjusted Net Investment Income represents net investment income, excluding capital gains incentive fees. We use this non-GAAP financial measure internally to analyze and evaluate financial results and performance and believe that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends without giving effect to capital gains incentive fees. The Company’s investment advisory agreement provides that a capital gains-based incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital appreciation) to the extent such realized capital gains exceed realized capital losses and unrealized capital depreciation on a cumulative basis. We believe that Adjusted Net Investment Income is a useful performance measure because it reflects the net investment income produced on the Company’s investments during a period without giving effect to any changes in the value of such investments and any related capital gains incentive fees between periods. The presentation of Adjusted Net Investment Income is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.

The following table provides an unaudited reconciliation of net investment income (the most comparable U.S. GAAP measure) to Adjusted Net Investment Income for the periods presented:

		For the three months ended September 30,												For the nine months ended September 30,
		2021						2020						2021						2020
$ in millions, except per share data		Amount			Per Share			Amount			Per Share			Amount			Per Share			Amount			Per Share
Net investment income		$	12.7		$	0.45		$	12.2		$	0.43		$	35.1		$	1.25		$	36.7		$	1.33
Capital gains based incentive fee			0.8			0.03			—			—			6.2			0.22			—			—
Adjusted net investment income		$	13.5		$	0.48		$	12.2		$	0.43		$	41.3		$	1.47		$	36.7		$	1.33

Conference Call

The Company will host a webcast/conference call on Thursday, November 11, 2021 at 12:00 p.m. (Eastern Time) to discuss its financial results for the quarter ended September 30, 2021. 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 one of the following numbers:

Domestic: (855) 982-6679
International: (614) 999-9468
Conference ID: 6937369

All callers will need to enter the Conference ID followed by the # sign and reference "Crescent BDC" 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) See “Non-GAAP Financial Measures” above for a description of this non-GAAP measure and a reconciliation from net investment income to Adjusted Net Investment Income. The Company's management uses this non-GAAP financial measure internally to analyze and evaluate financial results and performance and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company without giving effect to capital gains incentive fees. The presentation of Adjusted Net Investment Income is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.

2) Yield excludes investments on non-accrual status.

3) 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			As of
		September 30, 2021			December 31,
		(Unaudited)			2020
Assets
Investments, at fair value
Non-controlled non-affiliated (cost of $1,030,512 and $920,693, respectively)		$	1,047,087		$	923,912
Non-controlled affiliated (cost of $42,997 and $50,431, respectively)			51,336			71,354
Controlled (cost of $40,000 and $40,000, respectively)			40,207			38,735
Cash and cash equivalents			6,467			1,896
Restricted cash and cash equivalents			13,027			12,953
Receivable for investments sold			15,302			6
Interest and dividend receivable			7,581			3,859
Unrealized appreciation on foreign currency forward contracts			1,915			264
Deferred tax assets			54			630
Other assets			210			543
Total assets		$	1,183,186		$	1,054,152
Liabilities
Debt (net of deferred financing costs of $4,830 and $4,600, respectively)		$	557,071		$	471,932
Distributions payable			11,549			11,549
Incentive fees payable			7,882			—
Interest and other debt financing costs payable			3,503			3,923
Management fees payable			3,055			1,867
Deferred tax liabilities			1,079			1,324
Unrealized depreciation on foreign currency forward contracts			587			896
Directors' fees payable			127			98
Accrued expenses and other liabilities			2,181			2,563
Total liabilities		$	587,034		$	494,152
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, 28,167,360 shares issued and outstanding, respectively)			28			28
Paid-in capital in excess of par value			594,658			594,658
Accumulated earnings (loss)			1,466			(34,686	)
Total Net Assets		$	596,152		$	560,000
Total Liabilities and Net Assets		$	1,183,186		$	1,054,152
Net asset value per share		$	21.16		$	19.88

Crescent Capital BDC, Inc.
Consolidated Statements of Operations
(in thousands except share and per share data)
(Unaudited)

	For the three months ended								For the nine months ended
	September 30,								September 30,
	2021				2020				2021				2020
Investment Income:
From non-controlled non-affiliated investments:
Interest income	$	22,232			$	16,132			$	60,570			$	48,424
Paid-in-kind interest		184				501				966				1,747
Dividend income		1,373				7				1,427				182
Other income		254				—				577				1,060
From non-controlled affiliated investments:
Interest income		305				338				904				1,009
Paid-in-kind interest		139				485				1,168				970
Dividend income		291				511				2,134				1,940
From controlled investments:
Dividend income		700				700				2,100				1,500
Total investment income		25,478				18,674				69,846				56,832
Expenses:
Interest and other debt financing costs		5,695				3,504				14,482				11,484
Management fees		3,531				2,909				10,082				8,327
Income based incentive fees		2,663				2,136				7,528				6,335
Capital gains based incentive fees		757				—				6,150				—
Professional fees		522				354				1,516				1,060
Directors' fees		127				100				361				339
Other general and administrative expenses		692				631				2,076				1,852
Total expenses		13,987				9,634				42,195				29,397
Management fee waiver		(476	)			(1,163	)			(3,096	)			(3,427	)
Income based incentive fees waiver		(931	)			(2,136	)			(5,796	)			(6,335	)
Net expenses		12,580				6,335				33,303				19,635
Net investment income before taxes		12,898				12,339				36,543				37,197
Income and excise taxes		170				131				1,403				480
Net investment income		12,728				12,208				35,140				36,717
Net realized and unrealized gains (losses) on investments:
Net realized gain/(loss) on:
Non-controlled non-affiliated investments		280				2				4,497				(1,021	)
Non-controlled affiliated investments		27,513				(526	)			27,513				(526	)
Foreign currency transactions		80				6				359				(155	)
Foreign currency forward contracts		(56	)			—				(193	)			—
Net change in unrealized appreciation (depreciation) on:
Non-controlled non-affiliated investments and foreign currency translation		2,897				19,051				13,336				(20,274	)
Non-controlled affiliated investments		(28,198	)			5,694				(12,583	)			14,086
Controlled investments		302				3,416				1,472				(5,513	)
Foreign currency forward contracts		1,523				(1,349	)			1,959				623
Net realized and unrealized gains (losses) on investments		4,341				26,294				36,360				(12,780	)
Realized loss on asset acquisition		—				—				—				(3,825	)
Net realized and unrealized gains (losses) on investments and asset acquisition		4,341				26,294				36,360				(16,605	)
Benefit (provision) for taxes on realized gain on investments		2				—				(370	)			—
Benefit (provision) for taxes on unrealized appreciation (depreciation) on investments		(392	)			(161	)			(332	)			101
Net increase (decrease) in net assets resulting from operations	$	16,679			$	38,341			$	70,798			$	20,213
Per Common Share Data:
Net increase (decrease) in net assets resulting from operations per share (basic and diluted):	$	0.59			$	1.36			$	2.51			$	0.73
Net investment income per share (basic and diluted):	$	0.45			$	0.43			$	1.25			$	1.33
Weighted average shares outstanding (basic and diluted):		28,167,360				28,167,360				28,167,360				27,518,708

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 Capital Group LP (“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 $35 billion of assets under management. For 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, and London and more than 190 employees globally. 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:

Daniel 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, 2020 and quarterly report on Form 10-Q for the quarter ended September 30, 2021, each filed with the SEC, identify 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, 2020, which Crescent BDC filed with the U.S. Securities and Exchange Commission (the SEC) on February 24, 2021, Crescent BDC’s quarterly report on Form 10-Q for the quarter ended September 30, 2021, which Crescent BDC filed with the SEC on November 10, 2021, 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, 2020, 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 net investment income for Q3 2021?

Crescent Capital BDC reported a net investment income of $12.7 million for Q3 2021.

What is the adjusted net investment income per share for CCAP?

The adjusted net investment income per share for Crescent Capital BDC was $0.48 for Q3 2021.

How much did Crescent Capital BDC declare in cash dividends?

Crescent Capital BDC declared cash dividends totaling $0.41 per share for regular dividends and $0.05 for special dividends.

What was Crescent Capital BDC's net asset value per share at the end of Q3 2021?

The net asset value per share of Crescent Capital BDC was $21.16 at the end of Q3 2021.

How has Crescent Capital BDC's total investments changed recently?

Crescent Capital BDC's total investments at fair value increased to $1,138.6 million as of September 30, 2021.